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REGUNOMICS

It is our view that monetary and fiscal policy cannot affect the economic trajectory. It is the Federal, State, and Local policies that are killing the system.
  • The dollar has gone up ever since the Fed has come out dovish contrary to Trump’s agenda of a lower dollar
  • We will lose the “Race to the Bottom” as we are the Reserve Currency of the world.
  • Deregulation will translate into higher GDP
  • Deregulation means money to the peripheral
  • Quantitative Easing (QE) won’t work. We are running out of options (hence the current disaster in the repo market)
  • Conclusion: Must Deregulate to get out of this problem. Monetary and Fiscal Policy has been exhausted. President Trump is on the right track with tariffs as we can’t devalue our currency like the rest of the world.
  Regulatory Headwinds Examples
  • Healthcare Costs (Last 6 years up 500%)
  • OSHA: 50% of every civil projects’ costs are OSHA regulations
  • Illegal Immigration (~$400 billion)
  • Environmental Policies
  • Financial Regulation
  • Unfunded state pension liabilities exceed $4 trillion thanks to bad legislation
  • Government Employment (currently at ~16% of population)
    • Government workers earn 79% more than private sector civilians. Total cost almost $300B in 2018
Case Studies
  • California’s ability to fund a railroad was a complete disaster ($9 billion mistake)
  • Oregon spent $300 million on new software for Obamacare and signed up no one
Disclosure: Commentary provided is for informational purposes only and not an offer to buy or sell or participate in any investment strategy. Information provided is believed to be from reliable sources at the time this commentary was written. This commentary is not intended as investment advice, nor should it be used as a substitute for investment advice. Please contact your financial professional for advice related to your individual circumstances. Investing in the securities markets involves risk, including loss of principal.   CMP-0510
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