Since I just saw the theme of our editorial in this weeks Growth Stock Journal play on Fox News, I thought I'd paste it in here as food for thought.
November 19, 2001
Energy makes a big difference in our economy. In 1973 we saw the increase in prices suck disposable, then the non-disposable, income from the consumer. This time around the reverse action, the recent decline in oil price, may provide the fiscal lift that can give the economy the same boost as an income tax cut would.
The early 1970's was similar to the early 2000's in that the economy was coming down from a fevered pitch, but that is just about where the similarity stops.
Over thirty years ago the Federal Reserve was slower about bringing down interest rates in the face of climbing inflation. Commodity and oil prices climbed as the world had a strangle hold on the U.S. economy. Taxes were high and the Vietnam war was causing deep divisions within our society. The consumer had lost confidence and it seemed every dime earned was going to food, taxes, heat or gasoline.
In 2001, after over a year of a sliding economy, followed by the chilling terrorist attacks on American soil, it is understandable that everyone is feeling that we have seen the best of times.
But.... Americans have come together, unlike any time in the baby boomer's lives. And due to much lower taxes, lower food prices and better control of world oil prices, we have a fantastic disposable income. This will pull us out of this slump a lot faster than we recovered in the 70s. The drop in energy prices only adds disposable income to our pockets......Merry Christmas.
Sam
Sam@savvy-trader.com |
