We have all been desensitized to trillion dollar interventions by the US Government. Whether it was and is the right move by the US Government, the fact is it happened in 2020. And another massive injection of nearly $2 trillion is about to happen in Q1 2021. See this article about the $1.9 trillion plan here.
At the same time, we see intervention at the State and Local levels with mandated increases in the minimum wage. See this article on the states with mandated minimum wage changes here.
And, President Biden is very interested in pushing through the $15 minimum wage on a grand scale. See related article here.
Changes that Strengthen or Weaken the US Dollar?
First, a disclaimer, I’m not an economist nor a financial advisor and I’m not providing investment advice. However, these factors are just some current conditions that cause concern:
the combination of propping up the economy with ‘stimulus’ package upon ‘stimulus’ package
more businesses closing due to COVID and lock-downs
record low cost of money
increase in costs caused by minimum wage mandates
an administration with a strong lean towards increased regulation
The stock market remains high and for the most part, has recovered from the 2020 drop caused by COVID shut-down. See this DJIA 100 Year Historical Chart
Changes are inevitable and the decisions made to adapt and prepare for them will define the rate of success. This is the time, like no other, to focus on diversification of assets and business activity. Consult with your investment advisor about diversification of asset holdings, whether these are all US based companies or the portion of foreign investments. Also consult with your advisor about investing in ‘scarce’ assets, like real-estate (high value), Bitcoin and other crypto currencies, Gold and other metals.
Bill Gates is now the largest owner of US Farmland. A move that is likely not made on a whim. We’ve always heard that real-estate is a hedge against inflation. So, it looks like Gates is making a big hedge against the inflation risk. He’s invested not just in any land, but Farmland. Likely a hedge against more than just inflation. Maybe a hedge against an event even more devastating than decline in value of the US dollar.
Bitcoin has become a go-to alternative investment choice also. It is another ‘scarce’ asset.
What may have seemed crazy and fringe investments before are not becoming more mainstream. Consider this headline where a NFL Player is paid with Bitcoin. Now that is going all in!
A Video Worth Watching
In a recent video interview with Mark Moss, investor, entrepreneur and educator, we discussed many of the above topics. Mark provides great insight about investing in the ‘scarce’ assets, diversification, the crystal ball prediction on the Dollar and future global currencies. Will the dollar crash? Will we return to the gold backed standard? Will we ditch the dollar and move to crypto currency? Will we have a global crypto currency? Check out the video for his perspective.
A Positive Note to Remember
A good friend reminded me last week to think positive and remember, we live in the greatest nation in the World. And, as Believers in Jesus Christ, we have Hope for the future and the greatest resource of all for strength and peace. John 14:1 Let not your hearts be troubled. Believe in God; believe also in me.