The Retired Investor: Trump's Plan to Boost the EconomyBy Bill Schmick,
03:48PM / Thursday, April 03, 2025 | |
Transforming a government-heavy economy into one where the private sector leads not only takes time but also requires a period of detoxification, according to U.S. Treasury Secretary Scott Bessent. The idea that pain may need to come before any gains has caught the nation and the stock market by surprise.
Last week, I explained that "the administration's first objective, is to slow demand in the real economy. Keynesian demand-side economics says the best way to do that is to reduce spending. Doing so, they believe, will also slow inflation. How do they do that? By distributing less money to the greatest number of people possible. That means slowing wage 0 Comments
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@theMarket: The Tariff War BeginsBy Bill Schmick,
01:50PM / Friday, March 28, 2025 | |
On April 2, Donald Trump has threatened to levy tariffs on several nations. This is in addition to the tariffs he has already imposed on China, Mexico, Canada, and now global auto producers. The question is whether the "if" in tariffs is still possible.
No, it isn't. The president is making good on his campaign promises to create an even playing field between the U.S. and our trading partners. Steel, aluminum, and the global auto tariffs he announced Wednesday evening are only the beginning.
Unlike his first term, this time around his tariff initiatives will be "extensive, explicit and enforced," as one hedge fund manager told me. 0 Comments
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The Retired Investor: The Trump Economy 101By Bill Schmick,
04:06PM / Thursday, March 27, 2025 | |
For those of us in the business world, the myriad economic policy initiatives spewing from the White House are both confusing and at times difficult to understand.
Certain policies seem to cancel each other out. Full employment while reducing immigration, drill-baby-drill to force oil prices lower while raising tariffs to increase prices?
The point is that if even the professionals are having difficulty, how can those with little financial background hope to understand where the economy is going and why?
It appears, for example, that economic growth may be moderating as consumer spending weakens, while inflation remains stubborn. 0 Comments
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@theMarket: Fed No Longer in the Driver's SeatBy Bill Schmick,
03:25PM / Friday, March 21, 2025 | |
This week, the Federal Reserve Bank hiked its inflation forecast and reduced the growth target for the economy this year. Despite this news, traders termed the March FOMC meeting a "dovish pause," although it did not help the stock market.
The upshot of Chairman Jerome Powell's Q&A session on Wednesday afternoon after the FOMC meeting was that as far as the future is concerned, the Fed would need to wait and see just like the rest of us. In the meantime, the bank decided to slow its quantitative tightening program. That was interpreted as dovish by most Fed watchers since it does add liquidity to the credit markets.
Powell did say tariffs 0 Comments
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The Retired Investor: Foreign Money Going Home as American Market Dominance Begins to FallBy Bill Schmick,
04:38PM / Thursday, March 20, 2025 | |
The Trump administration's economic policies have placed a target on the back of most foreign nations. As for the economy, a slowdown, if not a recession, seems to be around the corner. As such, overseas investors have little reason to remain in America's financial markets.
Foreign investors represent about 17 percent of the overall holdings in the U.S. equity market and about the same in the bond market. Over the last 15 years, as I wrote in my previous column, American markets were the only game in town. While our share of the world's economy was only 27 percent, our share of the world's total investments was 70 percent.
America was 0 Comments
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