If you believe all our politicians, it’s China. See if you still believe that after reading:
Thanks to my friend, Kal Salama, I’m sitting out the current Fed Fiasco with 40% of my portfolio in two high grade corporate bond ETFs that are still up and providing me close to 6% YTM. If Professor Roach at Yale is right, you can put the blame on the politicians and ignorant pundits who think the $Trillions of debt and the trade barriers and tariffs were, and still are, necessary and good for America. If Dr. Roach does not convince you otherwise, then read Dalio’s book about the changing world order. See where America stands in Dalio’s view, as a place to invest.
I think our biggest problem is a congress that thinks jobs and economic growth are appropriate goals for a central bank. I agree with Hayek and Friedman: printing fiat currency will not create jobs or economic growth. It will, and did, create inflation. Corporations create jobs and economic growth. I believe we are in a technology revolution that will reshape the world and that is where my equity holdings are, not in value stocks. Switching to value might have been appropriate for the 20th century, not now! While China is embracing that point of view, America is busy dreaming up reasons to stem the tide. I remember a time when most Americans believed : “What’s Good for General Motors is Good for America.” Does anyone dare substitute, Silicon Valley, for GM, now? Most would substitute, ESG, for GM, including the management of GM. Yes, I think everything ESG stands for is good. But not as the driving force for America.
Well, I wish you all a very Happy New Year…and please, don’t tell my grandchildren, and yes, greatgrandchildren, I held these beliefs. It would be my last lemon cream pie.