Lawrence Fuller is a money manager in the Carolinas whom I have lots of respect for. The only negative about him is that he is an insufferable Tar Heel fan. I used to subscribe to his service. But now, I manage my portfolio on my own. He recently wrote: "Trump inherits a very strong economy, record-high market and housing wealth, low unemployment, rising wages at a rate not seen since the 1990s. Inflation has significantly decreased. from 9.1% to 2.7% over the past 2 years. Since early 2023, wage growth has exceeded the rate of inflation. The economy has expanded better than 2.5% for the 6th quarter in a row, which has not happened in 2 decades. "
"The elephant in the room", Lawrence writes, " is our federal government debt and ongoing deficits which are growing at an unsustainable rate. The market will likely be the arbiter on this subject."
I have been saying the above about our debt and deficits for awhile. In fact, I have written here that we will have a debt crisis during the Trump term, probably within 2 years. To be clear, neither Trump nor Harris talked about this unsustainable debt and deficits during the campaign. BOTH Trump and Harris made proposals that would worsen the situation. Now Musk is admitting that a $2 trillion cut in federal spending is unlikely (something I wrote on this site many weeks ago). Extending the Trump tax cuts will add $5 trillion to our nation's debt. BOTH Republicans and Democrats are responsible for what I expect to have a DEBT Crisis in the VERY near term. While BOTH parties are responsible, the Republican party will be blamed predominantly and hugely since they will have control of the White House and Congress. The only impact on me will be on investments because I am a retiree. I don't have to worry about my job and supporting a family. Investment portfolios will take a huge hit in a debt crisis. I hope I'm smart enough to shelter mine in the right places.
I know this is a political thread. But politics and investments intertwine. So, I will just add this: I suspect that the next decade has the potential to be the most challenging investment landscape in a generation to navigate. I hope I'm around to navigate it, rather than 6 feet under. Good luck to us all.