Worldview Investing - Ruminations on the World Economy

                                    Javier Milei, President of Argentina       There is no doubt the United States is in dire need of dramatic change. Its city, state and national debts are largely unpayable, public pensions are woefully underfunded, regulations suffocate large and small businesses, home, auto, insurance and food costs continue to rise, health, welfare and defense costs consume an ever growing portion of tax revenues. The nation is knee-deep in military conflicts (Ukraine, Israel, Syria, etc), its major cities are rapidly decaying due to long-deferred maintenance of hundred-year old essential services such as water, electric, sewer and roads, and they are plagued by crime and failing public schools.      The poor quality public schools have produced a growing legion of former students who have dropped out and others that are failing to a...

  While the US struggles with its debt and political dysfunction, many other countries around the world are also facing big headwinds.  England is suffering soaring social welfare costs, worklessness, illegal immigration, a broken national health service, dependence on foreign nations to meet its natural gas and electricity needs, the impending loss of its last steel plant, and a declining birth rate leading to fewer young workers to support a rapidly growing elderly population. Currently, 28 million private industry workers financially support 9 million people who are "economically inactive," 6 million public sector employees, and 13 million state pensioners. The top 10% of wage earners pay 66% of all taxes but continue to be hectored to pay their "fair share." The result? Nearly 400,000 British workers report their intention to move abroad in the next two years. Over 11,000 millionaires emigrated in 2024 - a 157% increase from the year before. Eventually, the tax ...

Tariffs      Donald Trump has embarked on his "tariffs are the most beautiful word in the dictionary" program. Every business that brings a product or service to the market incurs costs in doing so. That includes labor, materials, insurance, equipment, shipping, taxes and many other expenses. If tariffs are added to the cost, someone must pay that cost. Trump assumes it will be the foreign exporter. While the exporter may choose to assume a portion of the cost, it is inevitable that most, if not all, of the cost will be passed on to the consumer either directly or indirectly. We noted in our September issue,  [Trump] promises to impose tariffs on all imported goods. This additional cost will be passed on to the consumer in the form of higher prices. Tariffs have the pernicious effect of elevating all prices because the local producer can now raise his price to just below the now-higher cost of the imported good. Result? Consumers are left with fewer choices and ...