What a President Trump means – We think it means more conservative Supreme Court Justices, tax reform, trade reform, a reduction in forces overseas, stepped up immigration enforcement, and deregulation. But we’ll have to wait and see. Most of President-elect Trump’s policies were spotty when it came to details. But looking on the bright side for the entire nation, without the leash of special interest cash he is free to tackle very popular issues like ending carried interest and promoting education vouchers.
But there are two significant related issues that will bedevil his presidency: aging demographics and rising healthcare needs. He can’t turn back the clock. Our nation is aging, and the world population will need more care. The Affordable Care Act is wildly unpopular with some, but any alternative must still deal with the laws of math. Americans hate math. Nonetheless, more care means more spending. If we are providing care to those who were previously uninsurable, then it will cost more. Period.
Thanks to Dent Research, provided here is our weekly information roundup ending the weekon November 11, 2016. We start each subject with what you hear in the news and finish with what that information means to you. We hope this information will help you separate the noise from the news
Chinese Foreign Currency Reserves Drop by $45.7 billion Last Month… Showing the pressure on its currency, Chinese reserves fell to $3.12 trillion.
What it means – Even with more capital controls and stepped up enforcement, Chinese officials find it hard to keep money from flowing out the door. As the yuan drops, more people try to denominate their funds in other currencies. After Trump’s victory, the trend will most likely pick up steam. Remember a long time ago, in a galaxy far, far away, when people worried about the yuan replacing the U.S. dollar in October of 2016? Me either.
IRS Inspector General Calls Out the Service for Not Enforcing Bitcoin Rules... The Inspector General noted that, for tax purposes, Bitcoin is an asset, not money.
What it means – I know I keep bringing this up, but it’s important. For anyone using Bitcoin, government officials keep telling you that it’s not considered money in their eyes. That means it’s an asset with gains and losses on every transaction, with all of the accounting and tax implications. If Bitcoin ever gets big enough, this will become a huge, ugly mess.
No government wants its citizens to control their own currency destiny. No government wants the population to be able to take capital out of the country in the blink of an eye without limitation. No country wants value bleeding from the official banking system, the one controlled by the central bank, into the digital world.
Be very careful. When governments clamp down, demanding accounting, transparency, and tax payments, Bitcoin will get crushed.
Houston Office Space Vacancy Rises to 28%… This is up from 20% in 2012, and doesn’t include subleased space.
What it means – Houston has always been the epicenter of the oil business, even if it is far removed from most of the fields. In the latest oil price crash, Houston once again takes the worst hit, which is evident in how much office space sits empty. But this time the city was ready. While it can’t control what oil companies and builders do, the city worked hard to diversify its employment base as much as possible. The recent downturn is painful, but it doesn’t bear any resemblance to the oil crash of 1980… at least, so far.
Next Week – Economic releases jump into high gear in the third week of November, and will include industrial production, housing starts, retail sales, and consumer prices.
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