In recent months, we’ve witnessed the Federal Reserve decrease its balance sheet by almost $1 trillion. This reduction means that with less Fed credit available, market interest rates are bound to rise. As these interest rates increase, we can expect asset prices—including stocks, bonds, and real estate—to decline over time.
Grasping this concept is crucial. Ignoring it may lead you to decisions that you’ll come to regret, enduring the repercussions long into the future.
At Economic Prism, we maintain a guiding principle: we do not dwell on the past. Regrets can foster bitterness as one ages, and living with that bitterness is not a desirable way to spend one’s golden years.
While we refrain from closing the door on history, it serves as an invaluable teacher, highlighting what strategies have succeeded or failed. This knowledge is a resource that should be neither overlooked nor dismissed.
Nevertheless, it’s important to acknowledge that past successes do not guarantee future results. The landscape is constantly evolving; what may have worked previously could prove ineffective under new circumstances. Continue reading
The U.S. government’s fiscal year for 2023 wraps up at the end of this month. Are you excited about this development?
If you value the stability of your dollar-based savings and investments, along with the way your taxes are managed, you should be.
While the full fiscal year report won’t be available until mid-October, projections suggest that the 2023 fiscal year deficit will reach nearly $2 trillion—almost double that of the previous year.
What accounts for such a staggering deficit during a period of low unemployment and economic growth? Is countercyclical stimulus spending now a default strategy for the U.S. government? What implications would arise if this deficit spending were completely eradicated?
This week, the Treasury released its spending overview for the first 11 months of the fiscal year, revealing that the federal government collected $3.97 trillion in revenue. However, expenditures totalled $5.49 trillion, resulting in a cumulative deficit exceeding $1.5 trillion.
Every month except April and August has seen deficits thus far this fiscal year. In April, following the influx of individual income tax returns, the federal government managed a surplus of $176 billion. Continue reading
Is there a more challenging time than now to be an average American wage earner?
Initially, Washington flooded the economy with $6 trillion in printed money, leading to a historic surge in consumer price inflation—reaching levels unseen in 40 years. Simultaneously, this influx has diluted real wages, reducing them from a full-bodied lager to a light pilsner.
Currently, the pursuit of higher wages through unionization has triggered significant job cuts. The higher the wages rise, the fewer jobs remain.
For instance, just last month, Yellow Corp., a trucking company, filed for Chapter 11 bankruptcy. Yellow’s CEO, Darren Hawkins, attributed the company’s downfall to pressures from the International Brotherhood of Teamsters.
In contrast, Teamsters’ General President Sean O’Brien claimed that it was “Yellow’s dysfunctional, greedy C-suite” responsible for the company’s fate, asserting, “They shamelessly pin their corporate incompetence on working people.”
Who bears the true blame? The question remains open-ended. Continue reading
As Major League Baseball pushes through the summer’s sweltering days, many teams have already seen the hope of playoff contention slip away. With records below .500, their chances of qualifying via the wildcard have virtually evaporated.
In Atlanta, however, the mood is electric. Braves fans are thriving as their team boasts the best record in baseball and an impressive lead in the National League East. With just 30 games remaining as of this writing, they hold a commanding 13.5-game advantage in the division, making a playoff spot almost a certainty.
Numerous players on the Braves roster are enjoying standout seasons. Matt Olson leads the league in RBIs by a significant margin and ranks second in home runs. Meanwhile, Ozzie Albies, Austin Riley, and Marcell Ozuna are all hitting their stride.
On the pitching front, Spencer Strider is dispatching opposing batters with the efficiency of a seasoned warrior, leading the league in both strikeouts and wins.
But perhaps the most remarkable performances come from Ronald Acuña Jr. The 25-year-old right fielder is a force on the bases, leading the league in on-base percentage, stolen bases, and runs scored. In essence, he excels in getting on base, stealing bases, and scoring like no one else. Continue reading
