With government spending clearly out of control and a budget deficit expected to top $4 trillion this year alone, more and more forecasters are warning that inflation is going to soar later this year and next.

There is no shortage of negative economic and financial news that has been announced over the last week that I could continue to write about today. But the truth is, I’m tired of being all negative all the time. So today, I want to shift gears and tackle a topic that most Americans probably haven’t thought about, but one that I think we should.

While this may not come as a surprise, many US small businesses that are shuttered right now face a financial disaster. Unfortunately, it is becoming increasingly clear that millions of small businesses may not be able to reopen their doors when the economic lockdown ends.

American farmers faced a surge of bankruptcies in 2019, up 20%, despite aid efforts from Washington. The Trump administration allocated a record $28 billion in aid for farmers affected by his trade war with China in the past two years (more on this below), but bankruptcies were recorded at the highest level since 2011, according to a recent study by the American Farm Bureau.

Forget those fears of a global “Population Bomb” and worldwide famine which were made popular several decades ago. While the world’s population is still growing, birth rates in most developed nations are falling, including the United States.

With the year-end upon us, we are showered with economic and market forecasts for the New Year, as usual. Most of the forecasters I read expect the US economic expansion to continue next year, although many expect growth to continue to slow somewhat. Some I respect even predict the current unprecedented expansion will continue in 2021, thus further adding to the longest economic recovery ever recorded.

This is one of those weeks when there is seemingly a lot of news, but much of it – like the ongoing effort to impeach President Trump – is just simply “noise” that is not worthy of discussion herein. As a result, we’ll hopscotch through several topics of interest today that I think are worth talking about.

As regular readers know, I have been very positive about the economy in recent years, unlike many financial writers who have been predicting a recession for the last two years or longer – the so-called “PermaBears.”

It is becoming increasingly clear that the Left and the mainstream media believe the only way to get President Trump out of office next year is a US recession. They are increasingly stoking fears of a recession next year, and that led to some wild markets last week.

I’ve written a lot about our trade war with China in recent weeks. I’ve made clear I’m not a fan of President Trump’s tariffs. Fortunately, the US Trade Representative announced today that most of the new tariffs on China, which were set to go in place on September 1, have been postponed until December 15.

I wrote most of this E-Letter over the weekend and finished it yesterday morning. In it, I predicted that the ongoing political battle over raising the debt ceiling would continue until the last minute – sometime in September or October – when the government would run out of money and risk a dangerous default on its debt. In recent years, that’s what almost always happened.

By now I’m sure you have at least heard something about the new “Libra” currency that Facebook plans to roll out in 2020. There are those who welcome the new currency and believe there’s a chance it could rival the US dollar in the future.

The average American is getting older as Baby Boomers hit retirement age and our national birthrate continues to fall, according to new data from the US Census Bureau. The median American was 38.2years old in 2018, the Census Bureau said, up from 37.2 years in 2010.

Let me say at the outset, I’ve never seen anything remotely like this in my almost 40 years of following the Fed. Based on Fed Funds futures (CME FedWatch), the odds of a Fed interest rate cut on July 31 have surged to 100%. This is unbelievable based on what the Fed has said since its most recent policy meeting on June 18-19.

As you know, President Trump decided last Thursday not to go ahead with plans to bomb multiple Iranian military facilities, in response to Iran’s downing of an expensive US military drone last week. Mr. Trump initially received widespread, bipartisan praise for his last-minute decision not to bomb Iran. Even liberal news outlets praised him initially.

The Federal Reserve reported last Thursday that US household wealth hit a new high of $108.6 trillion in the 1Q. As I reported two weeks ago, we knew the number hit a new high, but we didn’t know exactly how high until last week. As we now know, the increase in household wealth in the 1Q was the largest ever recorded.

Today, we’ll look at last week’s second estimate of 1Q Gross Domestic Product. While the report showed the economy still growing by just over 3%, some of the internals of the report are troubling and suggest the economy will slow significantly just ahead.

Today we’ll look at new Fed data which showed that US household debt hit a new record high in the first quarter, marking the 19^th consecutive quarterly increase in debt held by American families. However, that same report noted that household balance sheets improved over the same period. How can that be, you might ask? I’ll explain as we go along.

In talking with clients, colleagues and friends, it occurs to me that a lot of adults (especially investors) have heard terms like the “Greenspan Put” or the “Bernanke Put,” but I also observed that most people don’t really know what they mean.

If the US economy remains in positive territory this month and next, as looks increasingly likely, this will be the longest economic recovery in America’s history. Expect a lot of celebrations just ahead. While that will be a true milestone, consider that Australia has not had a recession in almost 28 years!

The US economy has a tendency to lag in the 1Q following big holiday spending, but not this year. While there have been widespread predictions that the economy was slowing down and the recovery might be ending, the latest GDP report put all that to rest.

With the run-up to the 2020 elections already underway, President Donald Trump’s tax cuts have triggered the biggest partisan rift in two decades and could play a big part in whether or not he is re-elected.

We all know the federal government owns a lot of land around the country. You know – national parks, protected forests, tribal reservations, fish and wildlife refuges, rivers, historical battlefields and other sensitive areas. But I’ll bet you don’t know just how much of America the federal government owns. I sure didn’t, until last month.

The Commerce Department reported late last week that 4Q Gross Domestic Product rose only 2.2% (annual rate), down from its initial estimate of 2.6%. For all of 2018, GDP rose by 2.9% versus only 2.2% in 2017 and 1.6% in 2016.

Global economic growth contracted sharply in the second half of last year, from above a 4% pace in the first half to 2-2.5%. While still positive, momentum eased across all of the world’s major economies, including the US. The question is, will this global slowdown continue?

The US trade deficit soared to a new record high in 2018 according to the latest Commerce Department report out last week. President Trump has promised that his trade tariffs on China and other trading partners would reduce the trade deficit. They have only made it worse.

Long-time clients and readers know I like to write about topics that interest me, and this week is no exception. I debated whether to write about today’s topic since it deals with death and debt. However, as you’ll read, almost three out of four Americans die with outstanding debt, and the average debt balance upon death may surprise you.

A new Gallup poll released over the weekend showed 57% of Americans believe the US economy is either “excellent” or “good,”the highest reading in 18 years. That’s up from only 49% in January when the government was partially shut down and just following the stock market meltdown in December.

The national debt surpassed $22 trillion for the first time on Monday, February 11, a milestone that experts warned is further proof the country is on an unsustainable financial path that could jeopardize the economic security of every American.

Chinese negotiators recently offered to buy enough American products to reduce the huge bilateral trade deficit to zero by 2024. Yet US negotiators rejected that offer to end the dispute.

Today, I’m going to introduce you to an economist I have read for years. His name is Richard F. Moody. He is the Chief Economist at Regions Financial Corporation (Regions Bank) headquartered in Birmingham, Alabama. Regions is the largest bank in the South with almost 1,500 branches spread across the southeastern US and the Midwest.

Fed Chair Jerome Powell used the “patient” word again last week. He also added new words that the Fed can “wait and watch” before raising rates again. And he added another new word, that whenever interest rate increases resume, they will be “gradual.” The stock markets loved it!

The economy and the stock markets got some really good news last Friday. The Labor Department reported that a surprising 312,000 new jobs were created in December. That was nearly twice the pre-report estimate of 176,000. And there was plenty of other good news in the jobs report...

The US economy is booming with GDP growth of 4.2% and 3.5% (annual rates) in the 2Q and 3Q. Consumer confidence has soared over the last decade to near the highest level ever recorded. Corporate profits have exploded this year, thanks in part to Trump’s tax cuts. The unemployment rate has plunged to the lowest in decades at 3.7%.

This year, I have maintained a consistent positive view on the US economy and equity markets, this despite the fact that economies and stock markets have faltered in much of the rest of the world. My view has essentially been that the US economy is strong enough to decouple from the global economy.

In a speech last Wednesday, Fed Chairman Jerome Powell surprised the world with a reversal of his hawkish rhetoric regarding additional interest rate hikes. While another quarter-point rate hike is expected on December 19, most Fed-watchers now expect only one or two rate hikes in 2019. Stocks rallied strongly on the news.

The total debt shouldered by American households hit another record high, rising to $13.5 trillion in the third quarter. It was the largest quarterly jump since 2016. Meanwhile, the percentage of student loans in delinquency unexpectedly jumped to 9.1% in the third quarter, the highest level since the end of the Great Recession.

Stock prices around the world are in a tailspin which may get worse before it gets better. As of the end of last week, 11 out of 23 major global stock markets were down the requisite 20% or more from their highs to qualify as bear markets. This is very troubling.

Today’s discussion is one I write about every few years because millions of Americans don’t understand that they are being misled by the government and the media about the true size of our national debt.

Voter turnout for the November 6 midterm elections is widely expected to be at or near a record high. Emotions are high on both sides of the political aisle for this election, and pollsters are predicting a huge turnout by Republicans, Democrats and Independents.

On Wednesday, October 3, the Dow Jones Industrial Average soared to yet another new all-time record high just above 26,950 but then retreated to close well below the record high that day. The Dow then traded sharply lower on the following Thursday and Friday, dragging equity markets around the world lower with it.

Trump administration negotiators reached a major agreement with Canada on trade over the last weekend of September. The breakthrough, which came on the heels of an earlier deal with Mexico, vindicates President Trump’s tough approach to reforming trade and will mark a fundamental turning point for American jobs and global power.

Congress quietly passed a new bill expanding federal spending by an additional $854 billion last week before they left Washington. It hardly made any news at all. Sadly, that $854 billion only funds the government through early December.

Not long after I started studying economics in graduate school in 1975, I concluded that government-imposed tariffs on imported goods are almost always a bad idea. Ditto for trade wars. In general, the government has no business influencing the prices US manufacturers and others pay for the goods they import from abroad.

Last Saturday, September 15, 2018, marked the 10^th anniversary of the Lehman Brothers bankruptcy, which set off the worst US financial crisis since the Great Depression. It was the largest bankruptcy filing in US history, with Lehman holding over $600 billion in assets.

In light of last Friday’s better than expected jobs report for August, the odds are near 100% that the Fed will hike short-term interest rates by another 25 basis points at its next policy meeting near the end of this month.

If you listen to the media, you probably think the “middle class” is declining rapidly, not just here but around the world. It’s true, the middle class is declining in America, but not for the reasons the media would have us believe. It’s actually a good thing, and I’ll explain why as we go along today.

The current bull market in US stocks began on March 9, 2009 and tomorrow it will become the longest bull market in America’s history. The S&P 500 Index has advanced over 320% since its low in 2009. And most forecasters believe the market has further to run.

Most investors are not aware of this but the number of publicly-traded companies listed on US stock exchanges has plunged almost 50% since the peak in 1996. This phenomenon is not limited to the United States.

Republicans claim to be fiscal conservatives but they're governing like out-of-control swamp creatures. Not only has the federal budget gone up every year the Republicans have been in control, new data show they will outspend Democrats on so-called “earmarks” this year and will set a new record. It's time for a permanent ban on wasteful pork-barrel earmarks.