Week Ending May 21st, 2021
Russian hackers score big… Hackers made out with $5 million in Bitcoin from Colonial Pipeline.
What does it mean – Expect more ransoms as cost of electricity is no longer viable for poor countries or miners to mine for Bitcoin or other crypto currencies. That is a joke. But truth be told, the real joke is on us. The very folks who promote crypto currencies are often those who pedal in global warming.
Current home sales… Tight supply and high prices curtail existing home sales in April.
What does it mean – Existing home sales down 2.7%. The good news is that inflation just made your home more valuable because replacement costs. Make sure you look into your homeowners and fire insurance. Especially in CA if you live in an area that could be affected by wildfires.
Energy pipeline approved…White House approves new pipeline, creates new jobs, and lowers cost of energy. But not for the US.
What does it mean – Russian pipeline approved by White House. No new jobs for U.S. citizens or energy independence. Nope. I just can’t figure this one out. Puts us and our NATO allies at risk, rewards our enemies…or is Russia now our friend?
You just cannot make it up. Less than a year ago, Russia was our enemy and supposedly got caught messing with our last two elections. A week ago, Russian hackers held a significant part of our economy hostage as they shut down the Colonial Pipeline. Today, the very country whose hackers were rewarded with a giant ransom now gets approval by the White House to build a pipeline in to Germany that threatens our ally’s energy supply and puts us at a massive economic disadvantage. Not to mention the thousands of U.S. jobs lost and economic devastation to the US economy, employees, cities and small towns that depended on the Key Stone pipeline that was canceled less than 4 months ago.
Q1 GDP… Economic output up 6.4% annualized.
What does it mean – Personal consumption up 10.7% shows a lot of pent-up demand or we are flooding the economy with money. I bet on both. The world is starting to open. Summer is on us and folks are ready to get going.
Q1 savings rate up 21.0%… Wow, Wow, Wow. That even beat Q4 2020 by 8%. Where did it all come from?
What does it mean – Look no further than a big recovery for states that are open. They are leading in tourism, business creation and are seeing a massive migration from CA, NY, NJ, IL, OR, WA and others as folks seek prosperity. Sound familiar.
D.C. spends, spends and spends some more… Man, who is in charge? I thought congress had control of the purse strings?
What it means to you – Now 22 states have rejected the executive orders to provide an additional $300 weekly federal jobless benefit. Other than a few states like CA, many states have heard enough from small businesses and employers to recognize the ill effects of giving money away.
I am hesitant to share this video as I know, I will get some serious feedback. I honor you all and respect and value your opinions. I want that feedback and I crave it. It makes my team and I better. With that said, I take full responsibility of my actions and I am sharing this with you as I see a strong correlation between apathy and complacency and see the frustration from many of my clients who own businesses, run companies and call home to areas that are struggling to survive under a massive shift in policy since the release of COVID-19 over a year ago.
The business owners are on the front lines. They deal with the government officials mandating and inspecting their places of business while they watch society crumble at their doorsteps. They ask themselves why things are better in TX, AZ, NV, FL, ID, MT, UT, and many other states that refuse to tolerate lawlessness. The list of states that have fully opened and protect and honor the rule of law are flourishing. Others, like Santa Monica or maybe it is San Francisco, NY, Seattle or Portland.
What does it really mean to you? As a society, we get what we tolerate. Ask yourself, are we somewhere between apathy and dependence and on our way to bondage as described by Tytler’s cycle of history? To you, my friends, I hope your cup runs full with courage. Because that is what it will take to end the dependency on government handouts and the trappings of entitlements. Meanwhile, we sit back and watch the most productive in society vilified and destroyed by envy.
The video link below was sent to me by a dear friend who decided to close their business this past week. They built it!! They did everything they could to save it and maintain staff for as long as they could. They are now immigrating to a state with hotter weather and less taxes. It takes courage and I will miss them but blessed that I get to continue to work with them.
Policy matters. Decisions made by our elected officials are hurting our recovery and the very people they say they want to help. Watch this video about Venice Beach and Santa Monica. I have several clients who own restaurants and businesses and are struggling to stay open. It breaks my heart to see this. This is a wake-up call for us all, our economy, your investments and financial life, but more importantly our country.
We get what we tolerate.
Always at your service,
Doug De Groote, CFP®, MBA, CTC Managing Director