Market and Economy

Diligence is the mother of good luck

Benjamin Franklin

Aging Demographics and Medicare Advantage Growth Heal Outlook for Healthcare Sector

• On a secular basis, a demographic shift toward an older population has tailwinds in care needs and individual spending per visit. Medicare Advantage (Medicare Part C) will grow to become the largest payor by 2026.
• Healthcare is recession-resistant, with the largest payors, Medicare and Medicaid, being price agnostic toward care.
• A concentrated effort in the sector to expand margins through rate increases, cutting administrative costs, and reducing contract labor.
• US spending on healthcare will grow at a 7.1% 5-year CAGR – outpacing GDP by an estimated 240bps.

Read More »

Gold’s Resurgence in a De-Dollarizing World

• China/BRICS is actively working to reduce global trade’s dependency on the US Dollar, settling international agreements in their currency, the RMB.
• The US faces numerous economic problems, from the credit rating downgrade to ballooning debt and an aging population.
• Central banks have significantly increased their gold purchases, with a 152% year-over-year increase in 2022, primarily driven by countries like China and Russia seeking to move away from the US dollar.
• Gold has been a historically stable value asset, now being one of the only options now that Treasuries are falling out of favor internationally hinting at its potential to reach unprecedented price levels.

Read More »

Video: QT resuming, Credit Crunch underway, US Government Debt Squeezing out Private Sector.

• Markets had a strong June based on 7 stocks and pushed the S&P500 up almost 16% on a year-to-date basis. The rest of the market is only up around 3%.
• In March, regional banks crises kicked off with big losses on US government bonds and deposit flight. The crises will probably move to commercial real estate which is being hit by increased vacancies and higher interest rates. QT reversal was executed to slow crises. This has worked so far but unlikely to stem crises.
• My caution since January has proven wrong as QT reversal, investment sentiment and already existing liquidity drove market higher.
• Behind schedule on QT, but the Fed is still staying the course. The economy is weakening.
• Federal deficit too high at $32 Trillion, the debt ceiling debacle highlighted this. Private spending and investment will be squeezed out by federal government borrowing.

Read More »

Video: Debt Ceiling Theatre – US Debt Crises in the Future

Reducing Social Security and Medicare politically impossible. The Federal Reserve restarting QE (Quantitative Easing) and buying the US debt to keep rates down. QE is the most likely choice and will be wildly inflationary. Recession seems to have started in the second quarter. QE will most likely be used to restart the economy once the recession has caused enough pain.

Read More »