De Groote Financial Group March 23, 2022 No Comments

Week Ending March 18th, 2022

Inflation remained at a 40-year high… What is it called if you keep doing the same thing over and over and expecting different results?

What does it mean – According to Teresa Ghilarducci, a Bloomberg labor economist, it might be better to start eating more lentils and stop taking your pet to the vet.

Remember what Lenin said, “the way to crush the bourgeoisie (fancy word for the middle class) is to grind them between the millstones of taxation and inflation.” This administration is certainly adding to the inflation and through more regulation, creating more costs and more bureaucracy for the average American.

February nonfarm payrolls increased by 678,000… Yet, still more people out of work than pre-pandemic levels.

What does it mean – Many are just giving up or are content with staying on the government doll. February unemployment rate was 3.8%, versus 4.0% in January. Persons unemployed for 27 weeks or more accounted for 26.7% of the unemployed, versus 25.9% in January. The U6 unemployment rate, which accounts for unemployed and underemployed workers, was 7.2%, versus 7.1% in January. The unemployed or under-employed continues to rise. Folks we have an issue, and it is a moral dilemma enabled by bad fiscal policy.

New home sales decreased 4.5% month-over-month… On a year-over-year basis, new home sales were down 19.3%.

What does it mean – The key takeaway from the report is the recognition that the sale of lower-priced homes has decelerated. This is leading to higher-priced homes accounting for a larger percentage of new homes sold, which is driving up both median and average selling prices. Between rising interest rates and inflation, first-time home buyers are feeling the pinch and getting squeezed out of the market.

Treasury receipts for the month of February… The Treasury brought in a record $289.9 billion this month in taxes.

What does it mean – It would be significant if you could get control of your congress and the President. As a nation last month, we spent $506.5 billion. $127.6 billion on the Department of Health and Human Services, $106.9 billion for the Social Security Administration, $80.9 billion for “other Outlays,” and $55.3 billion for the Department of Defense. Let’s not forget we also are spending more on securing eight other countries’ borders than we do on our own according to the budget just passed by both houses and signed by the President.

“Voters got what they ordered”… At the Democratic National Committee event last Saturday, March 11, 2022, Vice President Harris said, “Our task is to show people that, in many ways, they got what they ordered.”

What does it mean – I am not sure about you, but I don’t remember the country ordering record inflation, record amounts of crime, energy dependence on the middle east and Russia, a less safe world, and more government regulations and bureaucracy leading to higher fees and costs of production.

Print baby print… The Good news is the government printed so much money over the last 16 months that there is nowhere for it to go but…

What does it mean – According to the Board of Governors of the Federal Reserve M2 money supply has gone from $15,470 billion to $21,840 billion from February 2020 to February 2022. That is an increase in the supply of money of 41.17%. See graph below:

Milton Friedman famously said, “Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

The Treasury has yet to prove it is slowing down the printing presses and the Federal Reserve is actually unsure of its ability or who they are and what they do.

So for all of us –

Let’s Roll,

Doug De Groote, CFP®, MBA, CTC Managing Director

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure, and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.
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