We're only two weeks into the new year, but we're already seeing the potential for short- and long-term economic and fiscal impacts from a range of activities, from new state and federal regulations to rising tensions around the world. there is.
From today's Q1 perspective, here are a few things to keep an eye on as we head into the year.
Bigger rules with bigger impacts
There are several rules that have been implemented or announced in 2024, and we need your voice and advocacy to overturn them and the harm they cause. First, the Ministry of Labor imposed rule This threatens to eliminate tens of millions of gig worker and independent contractor jobs, potentially upending small businesses and the entire economy.This is based on something scary AB5 law From California, the incubator of all bad ideas.
Next is a mass data collection program related to “beneficiary information” under the Corporate Transparency Act. Target small businesses.
Additionally, the Securities and Exchange Commission is considering whether to approve it. natural assets company A listing on the New York Stock Exchange threatens all of our natural resources.
We need your advocacy to resist and abolish all of the above.
Also, the SEC has finally approved a number of spot Bitcoin exchange traded funds. This will definitely change the landscape of cryptocurrencies, but also central bank digital currency The issue is back in the spotlight.
Hard or soft landing for consumers and the economy
Many challenges remain in the backdrop of the bond, bank, and debt downgrades that caused problems last year, and all of the aforementioned issues are still ongoing.
we have seen GDP growth rate on paperExpecting that level of growth to continue this year, at the expense of consumer balance sheets and huge government deficits, will require a real change in productivity.
Will government spending help keep GDP in positive territory, or will there be a recession in 2024 (which is expected to be a mild one)? As was the case last year, if you look at the economy in pieces, you may find that things vary widely depending on factors such as industry and consumer wealth levels.
And the threat of inflation remains very real.
Either way, the Fed will have less work to do, as large government budget deficits remain a problem for supply and demand in the Treasury market. The Fed may need to intervene to avoid chaos.
election
We've already seen several states trying to keep former President Trump from voting, a lot of infighting within the Republican Party, debate over whether Joe Biden will advance to the November election, and Congress trying to decide whether to vote on the election results. Nevertheless, even with a change in leadership, it seems unlikely that they will make any significant financial progress before the election.
Elections often involve market volatility, so be prepared for that.
Also, don't be surprised if we see shifts in tone and policy in key areas, such as a shift in Federal Reserve policy to support the stock market ahead of the election. The Fed will claim that it is not acting politically, but you are the judge of that.
BRICS and G7
In terms of the global economy, the BRICS countries (Brazil, Russia, India, China, South Africa) and other countries will continue to consider trade in their own currencies (as in the case of China, using gold options for settlement). (possibly recently).
One thing that could accelerate this is that various well-connected people, including former Treasury Secretary and Obama aide Larry Summers, have told us that the G7 will be able to “legally” remove $300 billion in Russian frozen assets. ''The request is to seize the funds and consider whether the proceeds can be used to raise funds. War effort in Ukraine. Yes, this may sound insane, but we know that the Russian asset freeze had all sorts of consequences for the US, and even led to an acceleration of the quest for de-dollarization and non-dollar trade. I am. G7 leaders are scheduled to discuss the move at their February meeting. According to recent reports.
peace dividend
The “peace dividend” is the economic stimulus that comes from a stable geopolitical environment. Some people think about it specifically (not going to war reduces defense spending, prevents economic destruction, etc.). Some people think of it in terms of emotions. Lower geopolitical volatility creates more certainty, and that sentiment moves markets in a positive direction.
In any case, as Citadel's founder and CEO, billionaire Ken Griffin, recently said, the peace dividend is “clearly nearing its end, if not completely finished.” “There is,” he said.
Russia's invasion of Ukraine began in February 2022. The fighting and the huge payments from U.S. taxpayers to keep Ukraine on the battlefield continued last year. A terrorist massacre in Israel by Hamas (supported by Iran) accelerated the violence and chaos, leading to a formal declaration of war by Israel. This has emboldened terrorist sympathizers to sow chaos across the world's major cities, renewing tensions in the Middle East as well as across the United States and Europe.
As the US projects weakness and a lack of leadership, the Biden administration has eased sanctions on Iran and given access to tens of billions of dollars in frozen funds, not to mention weakening the overall US financial position. (Remember, we gave permission), and there are growing concerns about the possibility of conflict in other regions. For example, China may see an opportunity to occupy Taiwan. North Korean dictator Kim Jong-un recently “We're not trying to avoid war.” Along with Korea.
Of course, other issues may arise or old issues may rear their ugly heads. So buckle up, make sure you have a full personal emergency fund (at least 12 months of living expenses), and consider hedging your portfolio. This is a critical time for our country's prosperity and yours, so please use your voice and take action wherever you can.
