Initial jobless claims below 250,000…

Labor market conditions remain tight.
What does it mean – This number will not help the fed out as they continue to fight inflation with higher interest rates.

Strong labor market…

While the numbers do not reflect the labor participation rate, payrolls in red states continue to outpace the fallout or contraction from blue states.
What does it mean – If you want a job and opportunity to earn more, low-tax states that shrink the government and protect the rule of law are attracting employers and employees as fast as CA, NY, NJ, IL, MD, MA and others can push them out. Policy truly does matter. This is adding to the Feds problem of wage-based inflation. Demand for labor in growing states continues to befuddle proponents of “Big Government”. Florida was just named Number One in fiscal and economic freedom. It goes without saying it is also at the top in overall freedom. I guess that throws wrench in to the media and this administration thoughts about fascism. Free people truly do flourish.

As China falls…

Reshoring continues in the manufacturing sector and across multiple industries.
What does it mean – Let them know you are glad they are back. Manufacturing continues to come back as China loses its luster and becomes more of a risk for many companies than a benefit. According to the Reshoring Initiative, 2022 could lead to a record 350,000 jobs coming back to the US due to China’s behavior, but most importantly, tax policy that was put in place in 2017 to bring companies back to the US and to make it easier to repatriate funds from overseas business activity.

Yet, with the signing of Manchin bill, our elected leaders risk making this more difficult by mandating a higher minimum wage, increasing corporate taxes from 21% to 28%, inefficient and less dependable energy needed for manufacturing, higher local transportation costs and increasing bureaucracy on businesses trying to come back to the US. Let’s not let governments greed and envy of the private sector squeeze the American dream.

New home sales down 29.6%…

Year-over-year new home sales continue to fall.
What does that mean – The adverse impact of rising mortgage rates and high home prices on overall demand is evident in the increased supply of new homes for sale.

Existing home sales across regions falls 5.9% month-over-month…

The numbers across all regions where down. Northeast (-7.5%); Midwest (-3.3%); South (-5.3%); and West (-9.4%).
What does it mean – Like new home sales, existing home sales are also getting hit with rising interest rates. Existing home sales also saw inventory of homes for sale at the end of July up 4.8% month-over-month. Yet, existing home prices for all housing types increased 10.8% year-over-year for the 125^th consecutive month.

ESG’s are destroying Europe and the US will follow…

ESG’s (Environmental Social and Governance) have forced Europe to shut down efficient and clean nuclear and natural gas power plants and now they are being held hostage by Russia and China. This has caused Germany to reopen less efficient coal fired energy plants and for its citizens head to the forests to gather wood for the winter to stay warm and heat their homes. Sharpen your ax folks.
What does it mean – Europe is headed to the Dark ages in the name of controlling what it cannot. All of Europe is warning of higher natural gas prices, higher oil prices, higher energy prices which mean higher utility prices, higher fertilizer prices, food shortages and massive inflation. Utility prices in Europe are expected to rise 80% in just the month of October. And this started way before Russia invaded Ukraine.

Can you imagine the audacity it must take to tell your grandma she can’t heat her home or keep her food from rotting because the climate is changing. If the current leadership believes that they can control a planet that has fostered life through volcanoes, floods, and natural disasters of Biblical proportion since the beginning of time.

Europe is headed backwards and dragging western civilization with it. It is leading its people down a path of servitude. The German Chancellor and President Macron want more power in the hands of unelected bureaucrats and more control for the European Union and less for its member states including their own countries. The scary part is they are achieving it through environmental fear mongering, illegal immigration, never-ending fear of the next new “COVID” worry, and the constant destruction of the nuclear family and out of control crime. Sound familiar?

The ruling class elite are so bold, they are telling you to stop worrying about grandma or your kids. In fact, President Biden recently said, “Get used to it.” I guess we all need to just stop looking at reality and listen to our Fuhrer. After all, they are from the government, and they are here to help. Here is a perfect example of unelected German representatives to the UN during a speech warning them about their unholy alliance with Russia. https://www.youtube.com/watch?v=FfJv9QYrlwg

20 million Americans are behind on their utility bills…

According to NY comptroller 1 in 8 New Yorkers are behind in their electric bill.
What does it mean – What did you think would happen when you cut the production of natural gas, nuclear, and coal for the sake of global warming? Prices skyrocketed and now the utility companies are forced to raise rates beyond the average American’s ability to pay. Without dependable low-cost energy your fellow American’s are more likely to freeze this winter than die from global warming.

Saudi lied and United Arab Emirates (UAE) is at capacity…

Caught in a lie, Saudi Arabia’s real reserves may be closer to 80 billion barrels. UAE tells Macron they are at capacity. “No more excess oil.”
What does it mean – Saudi Arabia’s comments about its hydrocarbons industry have long been regarded by industry experts as being as believable as China’s comments about its economic growth. Regardless, in the short-run, oil prices are going up.

There is good news. We have a solution. The safest, cleanest drillers on the planet are available. Miles upon miles of on-shore and off-shore oil fields filled with oil and natural gas. Mountains of coal ready for the taking. The manpower is ready, the equipment is available. It is our very own country. Yes, the United States of America is the solution.

The problem. The current administration has shut down refining capacity, stopped issuing leases to drill on federal land, encouraging citizens to drive electric cars they can not afford whose charging stations are powered by non-existent solar and wind farms that kill the insects, birds (what will that do to food production and the environment?), and make the planet hotter and are built by inefficient and dirty coal burning plants in China.

The great give away…

Nothing worthwhile is free. Just look at higher education. It has become a disaster. Eisenhower warned us of the industrial military complex and Reagan issued his famous warning about education and the teaching of our youth in his farewell speech to the nation. Reagan asked, “Are we doing a good enough job teaching our children what America is and what she represents in the long history of the world?” Eisenhower put it this way, “Our toil, resources, and livelihood are all involved. So is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. What we should be worried about is our children’s education and the indoctrination of our children by the education-industrial complex.
What it means – Biden is going back to the Hero’s Act designed for helping soldiers when we were attacked on 9-11. There is no standing or ability for the President to allow the government to cancel $500 billion in student loans. This is illegal and adds up to buying votes at the cost of investors and taxpayers. Remember too big to fail… This administration is trying it again. This time it is not the auto industry but people investing in degrees that will never earn enough to pay for the loans.

How it happened – In 2010 under the Obama administration and the excuse that education was too expensive, and the private lending done under banks was unfair. Obama and the democratic congress nationalized the entire education lending sector. No longer did banks lend on one’s ability to pay back the loan based on the potential that could be earned with achieving a degree in a particular field of study. For example, students who earn degrees in engineering will make more money so the banks were willing to lend more vs. a degree in gender studies. Now the government lends regardless of what you are getting your degree in. With such moral hazard why wouldn’t Harvard raise tuition by 30% or the UC system more than double tuition over the last 12 years? Here is what happened to student debt after the government took over.

The Scam – The universities spent $130 million lobbying to get this loan forgiveness done. You must ask yourself why?

What is DEI – Diversity, Equity and Inclusion. In the name of “ism’s” schools must make life fair. They created DEI departments. The universities needed the money to pay for the bloated overhead created by all the costs of the new DEI departments, staffs, and the high operating overhead of all the amenities they now offer.

• So, they raise tuition, and then convince students to take out loans to cover the tuition which is really to cover their inflated operating budget.
• The question turned from what are you going to study? To, where are you going to college? No one wants to be left out of the fun, so students want to attend the very best your government can afford. So, they borrow, not understanding the economics of what they are doing.
• Unlike the banks before 2010, the government makes the loan with no assessment of ability to repay, or if the course of study is one that will provide a job paying enough to cover repayment.
• Harvard, Yale, USC, Stanford, and every school in between get its operating costs covered by getting the students to borrow the needed working capital to operate the school.

Uninformed donors – My favorite part (full disclosure – I am guilty of this). Wealthy donors who want their kid or grandkids admitted donate into the school’s huge endowment which is just a giant investment portfolio.

• So now the university has gotten the student and the government to cover their operating costs, with zero liability to the university for the borrowed funds.
• Meantime they have courses like gender studies, or others that have zero value to the student or employers when they graduate.

Total scam. As of 2019 there are now over 500 bachelor’s degree programs. Over half evolved or were created in the last 15 years. And to add insult to injury, if you do not like the degree program at your university some schools will allow students to create their “own path”. Oh, did I tell you that the DEI departments are throwing out civil rights and now encouraging and allowing black only housing and graduations. Forcing complete areas on campuses at Cal, UCLA, and many other universities where white kids are not allowed. Yes, your tax dollars hard at work destroying civil rights.

If this payoff is allowed it will change how you invest in debt and the cost of capital for businesses, education, housing, everything. This is not a political issue. It is a moral issue that will impact your business how you borrow, and how you invest. It will change the value of a contract. This is bad for America, bad for business, bad for investors and will make it even worse for generations to come.

Let’s roll America!!

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

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

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.

The post What Happened Last Week and What It Means to You: August 26th, 2022 appeared first on DeGroote.

Initial jobless claims improved…

Job market continues to be tight and still on the mend.
What does it mean – The key takeaway from the report is twofold: first, the initial claims level is still a long way from pre-recession levels; and secondly, this report covers the week in which the survey for the August employment report was conducted. The low level of initial jobless claims supports expectations for continued strength in nonfarm payrolls, which of course should support continued tightening moves by the Federal Reserve.

More people working two or more full-time jobs in recent history…

Yet, the US still has more people unemployed and a lower participation rate since the forced shutdown.
What does it mean – Per the graph below we saw real wages increase from 2017 to the beginning of the pandemic and fewer people working more than one job. Since the pandemic and the forced shutdown more and more people are forced to work more hours to keep up with inflation thanks to abysmal monetary policy via the increase of the money supply, combined with reckless fiscal policy through endless increases in government spending.

All about the jobs…

According to the latest PriceWaterhouseCooper (PWC) half of U.S. companies are planning to cut jobs, even as business leaders fret about difficulties hiring and retaining talent
What does it mean – From the song Pompeii by Bastille, “Grey clouds roll over the hills
Bringing darkness from above.” Businesses are now starting to feel the pinch of inflation, higher wages, a messed-up supply chain, the cost of government intervention, etc. I could go on and on, but you get the drift. The only sector that’s booming despite it all is government along with its 87,000 new IRS agents. What we need is a bill passed by both the House and the Senate that limits salaries for DC to the national or state average in average in which they are stationed.

Housing starts in July decreased 9.6% month-over-month…

Sales also decreased the most in 20 years.
What does it mean – Housing is slowing down. Cost of living, increasing interest rates, and now the Inflation Reduction Act will force you to pay more, your hope of moving up is now just hoping you can stay. Increasing corporate taxes and increasing the size of government will surely increase the cost of government to us all.

England and the Eurozone…

Inflation is a global issue.
What does it mean – Like the United States, energy is paramount to a strong economy and low inflation. Take it away and make it less dependable, and more expensive and the cost of everything goes up.

Oil prices fall…

We are all enjoying a few cents savings, but why? Demand destruction.
What does it mean – Economists and business leaders have been warning about Demand destruction for some time. Once prices get too high, people stop using or look for substitutes. Consumer demand for energy has shifted as prices have increased substantially and the government has reduced the ability to process and refine crude and natural gas to keep up with needed demand. Demand destruction is exactly what is happening to the oil price as consumers are starting to use a bit less. With no help from the government drilling or begging won’t change the availability if the government continues to shut down refineries due to the added increase of regulations under this administration. Enjoy the price reprieve in gas while we have it. If we do not change policy, prices are heading back up.

You can’t make this stuff up!!

Starbucks asks Labor Board to suspend mail-in ballot for union elections…

According to CNBC, Starbucks asks labor board to suspend mail-in ballot for union elections, alleging misconduct in voting process.
What does it mean – HMMM-The very company and CEO who promoted mail in balloting on our national election is finding out the truth about voter manipulation and how fraudulent mail-in balloting is the hard way. If passed and Starbucks becomes unionized, I wonder what that will do to the cost of a cup of coffee. Your venti vanilla latte won’t get any cheaper, that’s for sure. I am sure earnings will struggle and we will have to change the name from “three bucks” to “six bucks”. Not to mention due to their support for BLM and ANTIFA, they are now being forced to close many stores in cities ravaged by crime, homelessness, and bad city politics run by left wing DA’s, Mayors, and Governors who let criminals free and homeless destroy the culture and fabric of their once safe cities and states. Look no further than CA, IL, NY, NJ. All seeing Starbucks closing shops along with many other national chains like CVS, Walgreens, Walmart, etc. In Beverly Hills, the boutique chain Kitson just banned masks. Apparently, the robbers and thugs are using the mask mandates as ways to circumvent the rule of law and hide their faces from cameras. Wow…who would have thought? Every store owner in America complained about this and now business and the safety of staff, clients, and innocent bystanders suffers under the fear mongering of the federal, state and local governments.

Let’s roll America!!

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

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

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.

The post What Happened Last Week and What It Means to You: August 19th, 2022 appeared first on DeGroote.

Weaker economic conditions elevated investor fears…

Last week we saw a rally in the treasury market.
What does it mean – Investors are fearful as signs of a recession are starting to confirm we may already be there and coupled with rising inflation the Fed may push us over the edge as they continue to try to fight inflation with higher rates? Some are now expecting a full 1–point increase on July 27th.

Initial jobless claims increase above 250,000…

For the week ending July 16, jobless claims increased by 7,000 to 251,000.
What does it mean – This is the first time we have gone over 250,000 since mid–November 2021. The job market continues to be quite tight even as we see our economy continue to stumble from self–inflicted wounds.

Oil off its recent highs…

Due to elevated recession fears, oil prices have backed off since peaking in June.
What does it mean – Regardless of what you hear from the state-run media, the government has done nothing to bring prices down. National gas prices are down roughly $.40 in the month of July. Gas prices have more than doubled since the end of 2020.

Real disposable personal income…

Down 3.3% year-over-year marking the sixth straight decline.
What does it mean – Inflation is not transitory, and the pain may accelerate as the Fed continues to step in with higher interest rates as they continue to fight out of the very corner they put themselves in to.

Existing home sales across regions…

Northeast (unchanged); Midwest (-1.6%); South (-6.2%); and West (-11.1%).
What does it mean – Total sales in June were down 14.2% from a year ago. With rising interest rates and continued inflation, there are fewer potential buyers. The housing market will continue to struggle.

Supply Chain is about to get messy out west…

California passes new law prohibiting independent truckers in the state.
What does that mean – There are over 70,000 independent truckers in CA that are protesting by shutting down the ports and protesting against big government overreach. These truckers are business owners and yet, our state is doing the bidding for big business and unions. This will drive up costs of everything you purchase, ship, or consume.

In the meantime, if these truckers want to work, they can expect their costs to go up by nearly $20,000 per year according to the Independent Trucking Association. This is inflationary and will only add to the pain all of us feel at the stores. Cost of goods will go up as shipping costs will increase by roughly $1.4 billion dollars a year. You must ask yourself, “what else can the CA governor and Sacramento due to make it harder on our small business owners and citizens?”

Strategic Petroleum Reserve at lowest level since 1985…

And this administration sells our oil to China.
What does this mean – Folks, you can’t make this stuff up. In a partisan vote, every Democrat in congress voted on Wednesday July 20^th to continue to supply China with oil form our Strategic Petroleum Reserve. On that same day, it was released that nearly 1 billion barrels have been sold to an American subsidiary of Sinopec, a Chinese company in which Hunter Biden is heavily invested in and has worked with.

Our government is choosing China over our citizens and treating you like subjects. We are redistributing our wealth and treasure to a country that violates everything a moral society believes in and stands for. You should be asking yourself, “why are we supplying China with everything they need but denying the American citizen the benefits of their tax dollars?”

Our citizens struggle with gas near $5.00 gallon on a national average and just across the border in Mexico it is roughly $1.00 cheaper than in the U.S. All of this is happening at the same time Congress votes to supply China with precious resources that belong to you, the American Citizen.

Follow the money. The current administration insists that the world will implode if we do not solve the climate crisis and rid ourselves of fossil fuels. Unfortunately, without oil, gas, and coal to fuel the factories that build and produce windmills, solar panels, electric cars, and transport these newly minted experts on climate would be unable to fly all over the world in their private jets. The Green New Deal is a pipe dream and has truly become a trojan horse for more government regulation and expense.

Reliable and cheap energy is the foundation for a thriving economy. One day technology may be ready to help ween us off of traditional energy, but it is nowhere close to being able to run the factories that actually build the electric cars, wind mills and solar panels.

If this administration really cared about the U.S. Citizen, they would release the drillers and reverse the closure of refineries in the U.S. We are about to be down 9 refineries by year end.

Winston Churchill famously said, “I am an optimist, it does not seem to much use being anything else.”

Let’s roll America,

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

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

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.

The post What Happened Last Week and What It Means to You: July 22nd, 2022 appeared first on DeGroote.

Who’s business is it?…

Since the beginning of COVID, the shutting down of our economy by government mandates at multiple levels gave in to big government and big business and we gave up a bit of our freedom for the perception of safety. Fortunately, even big business is now speaking out.
What does it mean – Business leaders are starting to push back and reclaiming their businesses from the grips of unelected bureaucrats and elected officials with not a clue how the economy really works.

For example, many in the oil industry are mocking President Biden’s tweets on oil and gas. They are asking the intern or whoever approved the recent tweets to enroll in a basic economics class. Jeff Bezos openly disagreeing with the White House on inflation. Elon Musk has been at the front, leading the way and pointing out the hypocrisy in DC and lack of fundamental understanding of how business and the economy really works. Again, our President and most of his staff have never run a business or worked in the private sector. Sure, his team is from the Ivy league and sure, Harvard and Yale are great schools, but at some point, theory gets punched in the face and hard work and facts matter.

When the going gets tough, the answer is not Washington or some bloated government program. It is freedom. We just celebrated the greatest gift to the world. The United States of America. Prior to the U.S. most generations thought they would live just like their parents before them. Destined for serfdom and subjects of a government ruled by mans laws.

Our Constitution ensures your freedom through three equal branches of government. Not through a King or through a majority vote, which across the world often leads to tyranny by the majority. But ours is special. How many countries have a Bill of Rights? How many Countries have a constitution protecting those rights and limiting the government’s power? How many countries have enshrined in their founding documents that the government will serve at the pleasure of its citizens and if violated the citizens can change it? How many countries are endowed by their creator and its citizens protected by natural law?

What we need are more Americans thinking things through on our own, with less rules, less mandates, less regulations, less bureaucracy getting in between you and the freedom to own your own destiny. Happy Birthday America. Take the moment to listen to 100-year-old veteran Carl Dekel. Listen to his pride, recognize his wisdom and passion for our country, and the fear he has for our future. Freedom is tough and even harder to keep. https://www.youtube.com/watch?v=wcnQJd_XRQQ

Initial unemployment…

Four week moving average is beginning to slow.
What does it mean – Disturbing news for the job markets. Initial claims increased by 7,250 and continuing claims increased by 5,500. What is concerning is the improving trend we have seen for the last few months has stalled out. Job market may be tightening.

Net exports continue to slide – From the graph above you can clearly see the massive fall off.
What does it mean – It is a culmination of many issues. 1) Bad fiscal policy and slowly letting up on China. 2) As the Fed raises interest rates, our dollar become stronger, and our goods become more expensive. This is seen above and in the fact that imports where up 18.9% vs. 18.3%.

Existing home sales decrease 3.4% month-over-month…

Total sales are down 8.6% from one year ago.
What does it mean – While existing home prices nationally are up 14.8% year-over-year, representing 123^rd consecutive month of year-over-year growth, which is the longest-running streak on record. It is also the first time the median price went above $400,000. The markets have been on a terror and nationally hitting new records. While still a tight market, the west coast was down 5.3% and folks looking to lock in gains and move to low tax states from CA are hitting the bid.

Housing starts down 14.4% month-over-month…

It is about darn time.
What does it mean – This rant has nothing to do with why housing starts are down 14.4%. But everything to do with why it should be down in CA a heck of a lot more.

If you live in CA, your local water district issued a warning if you use to much water. You will be penalized, and they will send you to water jail!!! Not really, they will just dox you and make sure your neighbors know how evil you are and put a governor on your water main. Ok, maybe not dox you. But they will limit your water.

As a CA resident and an American, I am sick of being told what I can and can not use. If I want to pay for it, then it is my choice. My decision and yours too. Seems to work for Obama in Palm Springs, Hawaii, DC, and now his fourth home in the Hamptons. Or how about our climate czar, John Kerry, who travels the world on private planes and uses more energy and water than most the folks on his block combined. Or how about Governor Newsom and his wine vineyards wine vineyards which were miraculously allowed to stay open while everything else shut down in 2020. I am sure he is getting whatever he needs. I can guarantee you they are living by different rules than you and I.

Here is the real science. Since records began in 1895, statewide annual precipitation has ranged from a low of 9.4 inches in 1924 to a high of 41.66 inches in 2017. According to the California Office of Environmental Health Hazard Assessment and the chart below it sure looks like we are tracking just as we have since the beginning of keeping records. Folks, we do not have a water problem. We have a government problem. Just like Smokey the Bear said, “Only you can prevent forest fires”. The same can be said about CA. Keep electing what we have had for the last 30 years, and you will get more of the same. Less water, less energy, less farming, fewer jobs, more homeless, more crime, more waste, more corruption, and less accountability. Are you picking up what I am putting down?

In CA, we have nearly 8 million people here illegally that we know of. We are building massive amounts of low-income housing that is being pushed by the federal and state governments on local municipalities by holding them hostage for state and federal grants, all while we have a “water shortage”. Ask yourself why? What we have is to many people attracted to our state for free handouts. California just announced they are going to give out a $1,000 to people to help fight inflation. Ahhhh, that is inflationary.

Bad policy is what is wrong. It is not a drought issue it is a planning issue and the greed of government officials who live off the property tax, planning fees, and permitting fees to fund their pet projects and secure enough votes to stay elected are driving the bus (over the cliff). Enough is enough. The reality is we have roughly the same rain and snow fall year over year on ten year rolling averages. Yes, we have droughts. Most of CA qualifies as a desert. But for some reason, God sees fit to fill our dams and rivers and aquafers even when we tear them down for the delta smelt, a frog, a bird or what ever else we deem irreplaceable and can be justified by “climate change”. What we need is CA government change.

Let’s roll America,

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

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

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.

The post What Happened Last Week and What It Means to You: July 1st, 2022 appeared first on DeGroote.

New Zealand hands out money to fight inflation…

Did the leaders of New Zealand ever wonder what caused inflation?
What does it mean – When career politicians and government bureacrats who so desperately want to keep power and yet have never run anything in their life but their mouths are in control of the treasury’s printing press, you can expect greater government spending, the urge to print more money, and more government programs all resulting in higher inflation and more expensive government.

Gas prices soar…

National average hits $4.62 per gallon and over $6 per gallon in California for the first time in its history. That is up $.44 per gallon over the last month and up over 50% over the last year, well before the Russian invasion of Ukraine.
What does it mean – According to AAA, 18 states are already over $5.00 per gallon and many more on the rise. Expect transportation costs to continue climb. This administration is set on devaluing and diminishing your income through higher gas prices which will translate into higher food and neceisities. Totally fixable.

Biden has no intention to relieve oil production…

On Monday President Biden doubled down on his decision to freeze new federal oil and gas drilling leases to tackle climate change.
What does it mean – Fuel prices are going higher and just wait until global demand spikes once China fully re-opens. Yet President Biden himself said that “when it comes to the gas prices, we’re going through an incredible transition” callously praising high fuel prices.

Our President and this administration are very happy to continue to shut down production, freeze leases, drilling permits, and any new pipelines here in America while begging OPEC and our enemies to drill more. Meanwhile, nations like Russian and Venezuela, and enemies of the free world enrich themselves in the process. This is a global wealth transfer that is funding the very people who hate our freedom, not to mention do so with far less environmental regulation and thus turning the climate change argument on its head. You should demand your congressman and senator to vote to end this immediately.

Some good news…

The U.S. $ is on par with the Euro and is also strong against the Yuan.
What does it mean – Good news for the consumer. This will make imports a bit cheaper. Not so good for domestic production.

Fed Banks of Richmond, Philly and NY…

In May all three fed banks showed major decline in factory output activity.
What does it mean – New orders and shipments all are down significantly from the prior month.

New home sales drop 16.6% in April…

Housing is key to economic growth.
What does it mean – Expect the housing market to continue to slow and prices to start coming down as interest rates go up, and all that “free” money continues to create inflation.

Nationwide home listings increased by 9%…

More people are rushing to sell in order to beat a downturn in the housing market.
What does it mean – Sales under contract declined by 3.9% last month and down over 9% from a year ago. This is the slowest we have seen it in over a decade (remember 2009-2011). We are now seeing more sellers in certain parts of the country as they flee poorly run states for vibrant growing states. HMMMMM?

Department of Labor releases data highlighting every states employment numbers…

Not so good for States that favored the shutdown of schools, businesses, and increased government spending.
What does it mean – The numbers are glaring. 100% of states run by Govenors and legislatures that protected individual liberty, limited government, and left decision-making to individuals and private business have more than recovered. Meanwhile all other states run by “big government” beuracrats and Govenors that favor more control and less personal liberty are only back to 87% of pre-pandemic numbers. You can guess which states are run by wich types of governments.

States like FL, TN, AZ, UT, KS, SD, TX and others prospered and are now far ahead of where they where before the pandemic. Ask yourself, not where you want to live, but under what type of leadership and do you want for your state?

Inflation is not going away anytime soon…

Inflation rose 9.57% since April.
What does it mean – You must be getting tired of hearing it from me. But here goes – Policy matters!! Until we change the policy, we will continue down this path.

Predictor-in-Chief Ronald Reagan was not just right but may be the best fortune teller of all time. Just read a few of his predicitons. Trully amazing. Reagan knew that too much government spending and printing of money leads to too much money chasing to few goods. Maufacturers and businesses will not produce more if they are dependent on the government for the supply of buyers. This is why a command-and-control economy like Russia, China, Cuba, and every other marxist country continues to fail over and over again.

Here is Reagan on Johny Carson. It is worth the watch and it is almost as if he is speaking about todays issues. https://www.youtube.com/watch?v=KBB78P4aids

Lets roll America,

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

805.230.0111 Main
800.984.3302
818.642.9789 Cell
805.230.0061 Fax

2660 Townsgate Rd Suite 450
Westlake Village, CA 91361

doug@degrootefinancial.com
www.degrootefinancial.com
www.lw4ip.com

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