Thanksgiving week was filled with a plethora of economic news and the worries of the new XI or Omicron variant. But more disturbing we are witnessing the breakdown of our society in major cities across the country. It is highlighted by the state of our legal system as we let out known criminals and do not hold accountable those who loot and destroy businesses and private property.
While the media goes silent on the damage done by the looters and the murder of a security guard, I am strengthened by the many acts of kindness and support for those who had their stores ransacked by thugs. Social media was filled with posts wanting to help support the stores and the employees who are threatened by continued shutdowns due to these thugs. Do they not realize that this increases the cost of everything when insurance goes up and the need for added security is now part of the cost of goods sold?
Small businesses, Malls, and Department Stores looted by organized gangs over the Thanksgiving weekend… San Francisco, Los Angeles and other big cities saw their Black Friday sales turn into five finger discounts. Malls and many high-end stores looted by thugs and one security guard killed by looters and hardly a mention of it by the media.
What does it mean…Disgusting!! When there is no accountability in the DA’s office, and we do not hold these people accountable we will continue to see small businesses destroyed by lawlessness and bad government policies that let bad people out of jail.
I am reminded of one of Alexis de Tocqueville’s greatest quotes about America. I am certain we will rise to the occasion.
“I sought for the greatness and genius of America in her commodious harbors, and her ample rivers, and it was not there. I sought for the greatness and genius of America in her fertile fields and boundless forests, and it was not there. I sought for the greatness and genius of America in her rich mines and her vast world commerce, and it was not there. I sought for the greatness and genius of America in her public school system and her higher institutions of learning, and it was not there. I sought for the greatness and genius of America in her democratic Congress and her matchless Constitution, and it was not there. Not until I went into the churches of America and heard her pulpits flame with righteousness did I understand the secret of her genius and power. America is great because she is good, and if America ever ceases to be good, she will cease to be great.”
CPI jumped 0.9% month-over-month…CPI is up 6.2% year-over-year.
What does it mean – Inflation has been anything but transitory. Every sector of the economy saw inflation. Energy alone is up over 30% year-over-year. That is a huge hit to low- and middle-income workers whose real wages have actually declined under the current policies enacted over the last 9 months.
Durable goods…Durable goods inflation is up 8.8% year-over-year.
What does it mean – This is the highest increase since 1980.
Jerome Powell…President Biden picks Powell to continue to run the Federal Reserve.
What does it mean – More of the same. Lose money and lack of leadership. Powell has been managing the Fed as if he was looking to get reappointed or truly believes in “Modern Monetary Theory.” I know he knows what it means.
Oil…We went from net exporter to beggar in 9 months and now the President has asked for a 50% increase on what’s left of drilling on public land.
What does it mean – The department of Interior and President Biden wants to raise royalties to the government by 50%. All of this comes at a time when the poor and middle class are suffering the most under inflation and the rising cost of energy. We are now dependent on Russia and the middle East to supply our oil. Not to mention, with huge reserves offshore, CA has yet to issue any new drilling permits. The question you should be asking is why does this administration want to enrich Russia and the Middle East? Why are they making decisions that are punishing the American citizens and holding our economy hostage to Russia and the middle East?
Housing…Last month we saw sales go up in the Midwest and South.
What does it mean – Month-over-month/year-over-year by region: Northeast (-11.8%/-26.8%); Midwest (+11.0%/-28.3%); South (+0.2%/-16.7%); and West (-1.1%/-33.1%). Key takeaway from this report is that new home sales are concentrated in high-priced homes as inflation pressures, supply restraints and labor issues are curtailing the building of lower-priced homes and affecting affordability for lower-income buyers.
Industrial production up 1.6%…Following 1.3% decline in September, capacity utilization rate also increased to 76.4%.
What does it mean – This is the best we have seen since January of 2019. Private enterprise is figuring out how to deal with government-made issues. Motor vehicle assemblies are up 18.8% month-over-month. Total industrial production was up 5.1% year-over-year.
Always at your service,
Doug De Groote, CFP®, MBA, CTC Managing Director
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