Unleash Prosperity Hotline – Weekend Edition Issue #1021
05/17/2024, 05/18/2024, 05/19/2024
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1) The Great American Wealth Creation Machine
Let’s put politics aside for a moment and marvel at the most spectacular period of wealth creation in the history of civilization. Yesterday the Dow-Jones eclipsed 40,000, before dipping back down slightly under that high water mark.
Now, to put this milestone in perspective: in the Summer of 1982 - a little over 40 years ago – the Dow briefly fell below 800. Since then it has grown 50-fold. (Even accounting for inflation real stockholder wealth rose by 10 times its value four decades ago.)
If the next 40 years are as bullish as the last 40 years, the stock market will be closing in at Dow 2 million. No other developed country/region — not Japan, nor Europe — has come anywhere close to that performance. Japan’s stock market has been virtually flat for the past 40 years. This stock boom has created vast new wealth for most families — thanks in part to programs 401k retirement plans — well more than 100 million Americans have shared in these massive gains.
The tragedy is that 100% of American workers haven’t shared in this wealth – which would have been the case if we had let workers put their payroll tax dollars into personally-owned index funds.
Liberals like Bernie Sanders and Elizabeth Warren complain daily about the concentration of wealth, but the single easiest step to democratize the wealth is through private Social Security accounts. Shame on them for not allowing that.
2) And Now for the Bad News on Recent Stock Returns…
As noted above, the vast majority of the gains from the past four-decade-long bull market from — Reagan through the Trump presidency — were REAL gains, not inflationary gains.
Not true under Biden. We estimate that about 80% of the stock rise during Biden's tenure has been phantom gains due to inflation.
Alas, these illusionary gains are subject to taxes since capital gains aren’t indexed to inflation.
Those who invested with after-tax dollars in vehicles like a Roth are hurt less by this, since their contributions grow tax-free. But the typical saver using pre-tax dollars, including in a traditional 401(k), will get absolutely crushed when withdrawing funds in retirement, and pay hefty taxes even on investments that haven't gain any value in real terms.
The just-released Census data show that the nation’s largest cities continue to grow at a glacial pace, relative to the US population. The 37 cities with more than 500,000 population had virtually no gain (0.06%) in 2023, versus 0.5% for the national population growth over the last year.
COVID lockdowns were a disaster for most big cities, and the residents aren’t (so far) coming back. Since 2020, the largest cities have lost nearly 650,000, while the nation was gaining 3,450,000 residents, indicating a gain of 4,100,000 residents elsewhere.
The five fastest-growing cities are all in states that voted for Trump in 2020. The five fastest declining cities are in blue states.
4) Brits Nix World Health Organization Post-Pandemic Power Grab – But Not Biden
Great news: the proposed treaty that the World Health Organization is pushing to govern future responses to pandemics is on the rocks. We view these treaty talks as extremely dangerous to freedom and national sovereignty. WHO wants to outrageously dictate when nations should shut down their economies and wants to create a fund that would redistribute income from high-income countries to low-income countries. (Private charities should do that, not international organizations.)
WHO is, of course, an organization that failed miserably during COVID and it became a total apologist for the corrupt and deceitful Chinese communist government.
Several countries are in open revolt against this latest WHO power grab. British Health Minister Andrew Stephenson wisely declared last week: "Under no circumstances will we allow the WHO to have the power to mandate lockdowns. Protecting our sovereignty is a British red line.”
How sad is it that the United States isn’t leading the charge against this sinister plot by an incompetent and power-hungry international agency? The Biden administration’s globalists want to reach a deal and has been silent on the draft treaty being prepared by the World Health Organization. The Republicans in Congress promised to defund WHO, but they gave up in the budget negotiations. The plug should be immediately pulled on WHO as soon as possible.
"The President and I, because of the Inflation Reduction Act, the Infrastructure Act, we are dropping trillions of dollars on the streets of America right now."
Dropping trillions of dollars to fight inflation. This administration is truly special – or deranged.
