We're going to talk about two things on Market Vizion today: boom and chaos.
Anticipating Economic Boom
What do I mean when I talk about boom? I'm talking about an economic boom. I'm talking about the economic numbers we're going to see in the back half of this year and the first part of next year. These are going to be, I anticipate, the strongest economic numbers we have ever seen. Here's why.
Continued Spending by Federal and State Government
The reality is every pocket book that can be activated is being activated right now. The federal government is running the printing presses at maximum speed, tearing it up and spending like drunken sailors.
The states have joined in. They're taking out additional debt, additional financing, borrowing more money. They're spending like drunken sailors just like their federal buddies.
The buildup and demand after two to three months of quarantine is beginning to show. You're seeing it in the economic numbers. You're seeing it in the hiring numbers as we're starting to see the unlocking of the American economy and add to that two additional huge pockets of capital.
Less Money Out - More Money Domestic
In 2019 more Americans traveled abroad to Europe and the Caribbean on vacation than ever before in history. Guess where no one's traveling this year...
All of that money is going to stay in the United States and help our economy recover. And whether it gets spent on travel and entertainment or whether it gets spent on accelerating the capital goods buying and the things that we buy every day, new cars, things like that, it's all getting spent in the US.
Protests Activate Latent Insurance Cash Reserves
Further, I mentioned last week, what's going on with the protests is fantastic. It hopefully is the initiation of a national dialogue and national movement on racial reconciliation and racial relationships.
But the riots and the looting that we've seen are triggering the issuance of, the unlocking of, the checkbooks of the insurance companies.
All of these things are lining up to activate capital. That's going to activate hiring. It's going to activate capital expenditures. It's going to activate our economy and bring the economic numbers that we've never seen before in terms of GDP growth.
That's what I'm anticipating in terms of boom.
Weathering Election Year Chaos
Briefly, let's talk about chaos. The reality is we are going to be bombarded between now and the November election. Every politician everywhere is going to spend every dollar they can get their hands on to buy your vote and my vote.
It is going to be a cacophony of noise regardless of your political affiliation. Right. Left. Middle. Mainstream. Fiscal conservative-social moderate. Whatever, it doesn't matter. This is going to be chaos.
All of these politicians are going to be trying to contextualize this economic data that's going to be booming against the backdrop of "They need your vote in November because this time it's different. This time is for the soul of America", yada, yada, yada.
We've all heard this before, and we'll hear it again in four years, but the reality is be patient. November is coming. The noise will start to quiet in December I promise.
Don't get distracted by the chaos. Don't get overly optimistic about the boom. As I said, the market is probably going to be range-bound here for awhile so we're doing the hard work of rebalancing and looking for opportunities, just be patient.
It's going to be a long slow summer, but it's going to be a loud one as we try to put up with all of the chaos coming out of the media and the onslaught on our senses.
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