- The literal shape of the U.S. economy…
- The “F” economy…
- From the desks of President Trump and Robert Kiyosaki… this book isn’t available anywhere else. But it should be. Go here to see why it’s so important — and how you can get your hands on it.
Dear Reader,
Which “letter” represents the trajectory of the post-COVID United States econ
Many argue the post-COVID economy most resembles the letter “K.”
The upward-sloping extension from the vertical line represents the beneficiaries of the economic arrangement.
Within this segment you will find Wall Street, corporations and, in the main, owners of assets.
The downward-sloping extension from the vertical line represents the laggards of the economic arrangement.
Within this segment you will find the laboring classes, smaller businesses and the non-owners of assets.
Is the Economy Really Shaped Like a “K”?
Yet another alphabet letter best represents the United States economy, argues Mr. Peter Tchir of Academy Securities.
It is not a “K.”
Nor is it an “L,” a “U,” or a “V.”
It is instead an “i.” The United States economy most resembles an “i.”
Not an upper-case “I,” mind you — but a lower-case “i.”
The two are as different as eye and “I.”
Mr. Tchir:
- I’m sick and tired of hearing about the K (or k) shaped economy. I don’t think it is as relevant as many seem to think it is… I was on a podcast this summer with Adam Taggart. He runs “Thoughtful Money” and he mentioned the i shaped economy.
Just so. Yet will you please, good sir, distinguish “i” from “I”?
- The premise is that “the dot” is doing extremely well and everyone else (“the stick”) is running in place.
- Look at the stock market. A handful of companies are generating the bulk of the returns. If it wasn’t for the AI story, the indices would be lower, but still up.
- The “little i” captures the outperformance by a small group, while not saying/arguing that everyone else is doing worse.
The “Have Mosts” vs. the “Have Somes”
In this telling the “i” lacks a downward-sloping segment.
It concedes that many may run in place, upon the hamster wheel. Yet they are not going backwards.
Thus the present order is not a warfare of the “haves” and “have nots.”
It is instead a quarrel between the “have mosts” and the “have somes.”
Mr. Tchir:
- That is one issue I see with the “K” or “k” shaped economy. It implies that a lot of people (50% or more) are doing worse. I just don’t see that right now.
- I see an economy that is disproportionately benefitting a small subset, but others, as whole, are doing okay. The definition of “OK” might vary, but the Atlanta Fed GDPNow Forecast is running at 3.3% — that doesn’t seem like the sort of number that implies a lot of people are doing poorly.
- So, if I’m asked, “what shape is the economy” or I decide to take a complex issue and summarize it with a “shape,” I’m going to go with “little i”…
- A fraction of the population (be it individuals, regions, corporations) are thriving at levels almost unheard of, while others do “just” okay.
Not Okay
I hazard there is overall justice here. Pegging along under relative comfort is not suffering.
The person pegging along eats… after all.
Yet I am not certain that the lined segment of the “i” is “just” okay.
The United States unemployment rate — the official United States unemployment rate — attained 4.3% last month.
Not since October 2021 has the official unemployment rate scaled that level.
I believe the true unemployment rate exceeds, substantially, the official rate.
That is because I believe the official rate is the product of statistical gimmickry and trickery.
Meantime, the labor force participation rate gutters at its lowest point in nearly three years.
Life Upon the Hamster Wheel
Reports S&P Global:
- The share of Americans actively in the workforce hit a new low in June, extending a stretch of workers increasingly exiting employment or the job search.
- In June, 62.3% of Americans aged 16 or older were working or actively looking for work, the lowest share since December 2022, according to the latest US Bureau of Labor Statistics data.
More:
- Meanwhile, continued unemployment claims — which count workers that already filed for initial unemployment benefits and are still seeking them — held at… the highest level since 2021, according to the US Labor Department.
- Taken together, the claims and labor force participation data may signal that some are becoming discouraged over finding work and withdrawing from the labor force, said James Knightley, chief international economist with ING.
The Fed Widens the Gap
Meantime, the gulf separating the “i’s” dot from its stem may widen to a chasm.
The Federal Reserve is once again reducing its target rate — even though inflation runs at large.
Inflation is the friend of asset owners. That is, inflation is the friend of those camped within the “i’s” dot.
Inflation, conversely, is the foe of those imprisoned within the “i’s” stem.
And rate reductions… as I demonstrated here… fatten Wall Street and enfamish Main Street.
In that article I cited Mr. David Stockman:
- The implicit thrust of Fed policy has been to severely punish savers, who, after taxes and inflation, have been badly crushed, and reward borrowers and speculators.
- The latter have essentially been offered free money on a short-term basis to fund their leveraged speculations via rolling over the Fed’s cheap overnight money day after day for years running.
The “F” Economy
Here I propose my own alphabetical classification of the United States economy.
Which best represents that economy?
The answer is not the “L,” “U,” “V” or “K” economy.
That letter is the “F” economy. Why?
The answer is because “F” represents the Federal Reserve.
The Federal Reserve’s nonstop meddling has imbalanced the United States economy.
And so “F” is the letter best fitting the United States economy — not “i.”
The Fed Gets an “F”
“F” is likewise the letter grade I would award the Federal Reserve.
I would merely refer you to the years and years of Federal Reserve competence.
Off for remedial education it must go — perhaps it will learn a useful thing.
Better yet, let this economic dolt drop out of school altogether.
Hard evidence demonstrate it lacks the intelligence required of higher education.
For all our sakes… let this economic ignoramus learn a trade useful to man.
Regards,
Brian Maher
for Freedom Financial News
