Post by
Experienced on Aug 21, 2024 10:57am
Thank You Biden - More Economic Fiction
Every August the US BLS revises the job creation number for the previous year.
So Biden (and Harris) have been touting all the job creation under their watch and how great the economy is. Well the BLS had to finally come clean and its revision today says it overestimated job creation by a whopping 818,000!!
That said, interestingly, the DOW just yawned with the announcement about a half hour ago.
What this doesmean is that it is hard to believe numbers published under Biden to be accurate as they are higher than the reality. As well the very underpinnings of the "wonderful" economy they have in the US is fueled by debt and increased leverage. To see this just look at the Federal Government budget where it is spending about 50% each year more than it is bringing in through tax revenue. This is compounded by consumer debt. Credit card debt in the US risen about 7 trillion dollars since COVID. This is high cost leverage by consumers. Both of these facts are strong economic stimulus (Econ 100) that is fuelling the record levels for the stock market.
One thing we do know for sure is that mounting US debt isn't going to stop since not only is there little appetite by either political Party to reduce the budgetary deficits, both have plans to increase it.
So as long as this continues, the stock market will do OK but the question becomes when will the pressures become so great that the dam breaks.
What you decide to do about this in terms of your asset allocation including energy is up to you but my best advice is to think about this carefully and not ignore this. As they say, if you are in an elevator going down and the power fails, the ride can be fun until the elevator hits the ground.