Managing the Evolving Macro Economy

Macro Scenario

In our previous post we outlined a macro scenario.  Here is what we see:

1) The current economic cycle is ending.

2) Two aspects that have been prominent in the last half of the current cycle are low inflation and weak growth.  Even the Fed and its chairman Yellen seem puzzled about this phenomenon.

Economic Factors Involved    

To us it would appear a number of factors are involved:

a) The various FED QE’s provided a basis for cheap money speculation that was not conducive to growth.

b) Globalization has increased global production of products through cheap inputs including labor.

c) US tax policy over this cycle has been formatted around a top down strategy that has moved more money to the top.

d) Proposed tax reform will only increase this money direction.

e) Consumer incomes in the bottom 75 % of the population, the consumer base of the economy, have not kept pace.


There is only one solution to this… expand the buying power of the consumer

1) Move more money to the bottom 3/4 of the economy through tax reform.

2) As a handout to the Corporations, reduce their tax to 27 % from current 35 %.

3) As an offset, raise capital gains taxes and top tier individual rates.

Do I think this solution will happen, not a chance, and therein lies the worm that will roll us into a new macro cycle.



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