A Look Forward

 

The Setup

  1. The country and probably the world has entered a zone for which the prime age 30-55 person is ill prepared, a zone of personal sacrifice. Since 1973, when the US draft ended, the vast majority of the population has only had to think of themselves. We hire our soldiers and we go forward. If one were trying to characterize this time, you may need to focus on a combination of the start of 1929 depression and 1942 WWII when both financial issues and the great unknown played a part.

Supply Side Backstory

  1. Since 1980 the supply side trickle down theory has dominated economics. This along with lowered tax rates has moved money to the elite money crowd and has decimated infrastructure, of not only roads and education funding, but also health care preparedness.

Economic Meltdowns

  1. To offset the numerous economic meltdowns since 1980, (1987, 2000, 2008, and 2020 ) the Fed has abandoned its role of stability and has become the savior of the misguided policies through low interest rates. The problem is: low interest rates foster a belief in low growth potential.

Wall Street Effect

  1. Additionally Wall Street has been strongly influenced by trickle down and has become an algorithmic game that has little interest in financing real growth. All this will have to change.

What Do We Do Now?

  1. So what do we do now? Are we entering the Great Reset, one that goes back to developments since 1980?  Are the initiatives of that time going to be overturned? How these matters are handled and there follow up will have wide ranging ramifications.

What does History say?

  1. Things that happened before in the Depression and in WWII caused huge changes in people’s lives and incomes as well as to the financial markets. These periods deserve review. Stocks in those times declined at times by 50 to 75 percent, not the 20 to 30 percent declines that Wall Street is currently talking about. Also volatility was present as 200 to 250 % rally’s happened at times.

Government Involvement ?

  1. So expect a lot of government involvement in many ways.

Investment Parameters

  1. Long term plans will require a core investment position with a recognized base value (not current market value) of around 25 to 50 percent of 2020 highs on both stocks and real estate. . This will allow one to deal with the volatility that will ensue over the next 7 to 10 years before new highs will be made.

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