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What Happened Last Week and What It Means to You: Week Ending October 13, 2023

Week Ending October 13, 2023

Federal Reserve pays banks $ billions. If this has not made you mad yet, it better…The Federal Reserve is using your tax dollars to pay banks and other financial institutions close to $300 billion this year at current interest rates to just hold reserves and to do absolutely nothing.

What does it mean – The taxpayer, you, are on the hook for nearly $300 billion while banks make record profits doing nothing, squat, zilch, not a Dam thing to earn it!!! Too big to fail – BS!! This is too much money in the hands of the swamp creatures running your government.

Let’s put this in perspective. In 2023 the Federal Government will bring in $3.97 trillion in tax revenue. Before the costs to manage the IRS, to collect, audit, manage and distribute, your government will hand over nearly 7.6% of all revenue from taxpayers to giant financial institutions that continually abuses its customers with fake accounts, fees, and insurance scams. HMMM. Can you say morally bankrupt?

Together with bad fiscal and monetary policy, the unholy alliance between big banks and big government is destroying entrepreneurism, small businesses, small banks, and increasing the cost of capital to everyday Americans creating a less competitive environment, higher costs, more regulation leading to more inflation all to protect their fiefdoms.

Follow the money. Through the first half of 2023, banks have already received $141.8 billion in risk-free income, more than the $102.3 billion they received for all of 2022 that I have been complaining about for the last 18 months.

With friends like this, who needs enemies? Along with a destructive fiscal policy and an accommodating monetary policy propagated by fear mongers clinging to the little control they think they have. We are witnessing in real time a transformation to a European style socialism structured around the few. This is also known as an oligarchy. Specifically in the financial, drug/pharma, medical, and media industries.

Eisenhower warned us of the industrial military complex.

Will, take heed, we are seeing the formation of oligarchies in the financial, pharma/drug, medical, and media forming through the help of big tech backed by Big Government. Policies are being passed in DC that increase regulation and suffocate the flow of capital making it more difficult to start and fund businesses and create new wealth. Unfortunately, this is backed by the largest of American companies in these sectors. Makes sense if you can control the people making the policy. Wouldn’t it be nice to have the government reduce competition by increasing the barrier to entry. In business, this creates a competitive advantage and is called a moat. Unfortunately, when the government gets involved, it becomes an utility that ceases to create shareholder value, new products, or invents new technology. It loses its competitive soul and relies on its sheer size and becomes dependent on government to make sure it can continue to exist as it no longer can compete in the free markets. I.E. socialism.

Like I said follow the money. Banks no longer have to compete for loans when you are sucking the taxpayer dry and pocketing billions with no risk at all. If you work for these institutions or bank with them, get ready for some life-changing events. History is littered with examples.

Small Businesses are not feeling the love…According to the NFIB, small business sentiment indicator declined last month.

What does it mean – See above. Regulations, bureaucracy, and fewer small banks equals less competition and an increase in the cost of capital. The great news is small business owners have grit. They don’t give up.

Increasing cost of capital…Businesses are reporting tighter credit conditions and rising rates on loans.

What does it mean – Like we discussed above, business owners need access to capital to create, grow, and invest in their businesses. If it gets too expensive something has to give.


Short-term business loans 9.8%…Short-term loans for small businesses has nearly doubled this year.

What does it mean – Under the current fiscal and monetary policies expect the cost of capital to continue to go up.

While Revolving credit increased by $14.7 billion in August to $1.285 trillion…Yet Consumer credit decreased by $30.0 billion to $3.684 trillion.

What does it mean – The key takeaway is that nonrevolving credit saw the biggest drop since December 2015, reflecting the tighter lending standards and reduced borrowing needs in the face of higher interest rates. Consumers maybe starting to tighten their built as consumer credit decreased at a seasonally adjusted annual rate of 3.8% in August per the graph below.

Too big to fail…The Federal Reserve might be transforming itself into the next institution that is too big to fail. Saving the banks, propping up assets, and creating a false sense of security is costing you a fortune.

What does it mean – The Fed is down about 12.8% for the first half of 2023. Not to worry its not their money…Its yours. With a bloated balance sheet that has gone from $700 billion in 2004 to nearly $8 trillion in assets, you have to ask yourself why? What changed in 2009? Take a look at the two charts below.

Inflation on a roll…A fiscal policy that keeps doubling down and refuses to cut spending.

What does it mean – This administration can’t seem to put the brakes on spending. First it was the American Rescue Plan that was signed in March 2021 that authorized $1.9 trillion in new stimulus spending to provide relief during the COVID-19 pandemic. Then it was the Inflation Reduction Act in August 2022, which was anything but an Inflation Reduction Act that approved $750 billion in new spending, with $370 billion of that going to green initiatives aimed at combating climate change driving up the cost of energy for every American.


Finally, an economist says it. Michael Faulkender, chief economist and senior advisor for the Center for American Prosperity, told the DCNF. “We must continue to remember that it is not only monetary policy that determines inflation,” “It is also fiscal and regulatory policy. Yes, monetary policy can get us back to 2% if the Fed keeps raising interest rates high enough. The problem is that the Biden Administration keeps pouring gasoline on the inflation fire by running $2 trillion deficits while imposing costly regulations that take supply offline.”

Let’s roll America!!

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.

Jeannie Ewing-Nicholson

Operations Manager

Jeannie started her career in the Financial Services industry in 1994 with Oppenheimer & Company. As part of the De Groote Financial Group, Jeannie is responsible for the operational needs of the firm including cash management and account administration. With her upbeat attitude and attention to detail, Jeannie provides an efficient streamlines experience to ensure clients meet their goals. Jeannie enjoys travel, outdoor activities, Pilates, and is a football and basketball fan. She resides in Westlake Village with her husband, daughter and son.

Mary-Ellen Lykken

Executive Assistant

Mary-Ellen, Executive Assistant at DFG, keeps the office running smoothly by providing administrative support and assisting with scheduling and organization. With a background in human resource and office management, Mary-Ellen comes from the non-profit and services industries.

Outside of the office, Mary-Ellen is committed to the advancement of independence and productivity for those with disabilities. By telling her story of the challenges and joys of raising a child with complicated disabilities, she hopes to help others navigate similar circumstances.

She is happiest when visiting her two grown sons. Otherwise, you can find her competing on the pickleball courts.

Sara Mariniello

Operations Manager

Sara is new to the financial industry only starting in 2022 when she was hired at De Groote Financial. As Operations Manager, Sara is responsible for all the paperwork surrounding opening accounts and investment paperwork and is also responsible for much of the client communication. Sara has her bachelor’s in science and nursing from Concordia University, Texas and worked as nurse for over a year prior to moving back to California. She loves all things sports and church related and is likely spending every free moment with her Husband visiting family in Texas and New Jersey.

Fadi Ahmed

Chief Operations Officer and Chief Compliance Officer

Fadi works with clients to ensure an exceptional experience. He coordinates and assures the planning process and wealth management tools are at your fingertips to provide the clarity you deserve and the transparency and access to all your accounts. Fadi ensures the data and information is reflective in our planning software. All changes and updates flow through his desk and he coordinates those changes with the rest of our team.

Andrew Krout

Wealth Advisor, Co-Chief Investment Officer

Andrew Krout is a Wealth Advisor at De Groote Financial Group, LLC. He also serves as a Co-Chief Investment Officer for the firm, focused on wealth management.

Previously, Andrew served as CIO with Kelly Financial in Boston Massachusetts since 2013. He is a licensed investment advisor representative and insurance producer. He graduated from Saint Francis University with a bachelor’s degree in both finance and accounting. He is a candidate for CERTIFIED FINANCIAL PLANNER™ designation. Andrew holds life insurance licenses in Massachusetts, New Hampshire and Connecticut.

Andrew is passionate about serving his clients and investment management and how to apply news and current events to investment decisions. He played Division 1 golf in college, and still enjoys playing and watching the sport in his free time.

David Darst

Co-Chief Information Officer

David Martin Darst, CFA is an Investment Advisor to DeGroote Financial Group, specializing in asset allocation and product selection. Previously, David served for 17 years as a Managing Director and Chief Investment Strategist at Morgan Stanley Wealth Management, with the responsibility for Asset Allocation and Investment Strategy. He joined Morgan Stanley in 1996 from Goldman Sachs, where he held Senior Management Posts within the Equities Division and earlier, for six years as Resident Manager of their Private Bank in Zurich.

David is the author of 13 books, including bestsellers The Art of Asset Allocation, 2nd Edition (McGraw-Hill), and The Little Book that Still Saves Your Assets (John Wiley & Sons). He also appears as a frequent guest on CNBC, Bloomberg, FOX, PBS, and others, and has contributed articles across a variety of publications.

David graduated with a BA in Economics from Yale University, and earned his MBA from Harvard Business School. He has lectured extensively at Wharton, Columbia, INSEAD, and New York University Business Schools, and for nine years, David served as a visiting member at Yale College, Yale School of Management, and Harvard Business School. He is a CFA Charterholder and a member of the New York Society of Security Analysts and the CFA Institute. 

Doug De Groote

Managing Director

Doug is a Certified Financial Planner™ (CFP®) with an MBA in Financial Planning, and is an active member of the Financial Planning Association (FPA). Before establishing De Groote Financial Group, Doug founded the United Wealth Management division of United Capital. Prior to that, Doug was a partner at Crowell, Weedon and Co. He regularly contributes to a variety of financial and general media.

Doug’s passion, and what he believes, is that everyone deserves the opportunity; they deserve to have the freedom and responsibility to be pro-active in achieving independence and financial success.

Doug’s life is focused around his family, wife and three children, and making sure they get the foundation that is necessary for them to have the awareness of the opportunities that abound in our great country.

Doug helps increase his client’s awareness and success, to identify and take advantage of opportunities that present themselves and help protect them from some of the pitfalls or obstacles that are thrown in our paths. With regards to their financial circumstances, Doug helps his clients identify their goals, plan for various outcomes and manage their assets to help them make their vision a reality.