May 21, 2013 (DJIA 15,384.24, S&P500 1,668.15)   

 

Some quick ramblings on the economy



I think the economy is in a stable growth mode. At some point, I expect the Fed will start raising short term rates from near zero. I also expect that the economy will still move along in a typical historical manner for an extended period. During that period, I would expect occasional recessionary periods.

I also expect moderate inflation at some point. Moderate inflation should have positive impacts on businesses and workers. Inflation is difficult for retirees. We have not had real inflation in over 30 years. Former retirees were a beneficiary of this lack of inflation, as well as an extended period of deflation.

I think the USA should strive to lengthen their debts to take advantage of low long term interest rates. I also think the government should earmark required future projects (not frivolous projects, but required infrastructure projects) and include full scale modernization of USA infrastructure.  A massive required infrastructure build can be funded with long term low interest rate loans.  This inexpensive funding may not be available in the future.

Manufacturing in the USA is currently 12% of GDP. I think manufacturing is starting to come back to the states. USA labor rates have been stagnant for a decade or so, traditional outsourcing nations had and have wage inflation, making USA more attractive. One should also include costs of manufacturing outsourcing, modern factories in the USA, which are not as employee centric.

When we design portfolios, the above has been a common thought process in our implementation and research of specific investments.

As always, we welcome the opportunity to discuss our outlook and investments with you.

Ron
 
Ronald R. Redfield  cpa, pfs
Redfield, Blonsky & Co. LLC
15 North Union Avenue
Cranford, NJ 07016-1103
 
www.rbcpa.com

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Disclaimer 

 

If you are a client of ours, and if you have questions regarding the company or investment mentioned in this report  please call our office. If you are not a client of Redfield, Blonsky & Co. LLC Investment Management Division and are reading these notes, we urge you to do your own research. We will not be responsible for any person making an investment decision based on these notes. These notes are a "by-product" of our research. We are not responsible for the accuracy of these notes. We are not responsible for errors that may occur in these notes.  Please do not rely on us to monitor or update this or any other report we may issue. In theory, we could come across some type of data or idea, which causes us to eliminate our long or short  position of the company or investment mentioned in this report   from our portfolios.  We will not notify readerís revisions to these notes. We are not responsible to keep readers of these notes updated for changes or material errors or for any reason whatsoever.   We manage portfolios for clients, and those clients are our greatest concern as it relates to investing. Certain clients of Redfield, Blonsky & Co LLC may not have the company or investment mentioned in this report   in their portfolios. There could be various reasons for this. Again, if you would like to discuss the company or investment mentioned in this report  , please contact Ronald R. Redfield, CPA, PFS (partner in charge of investment management division).  

Information herein is believed to be reliable, but its accuracy and completeness cannot be guaranteed. Opinions, estimates, and projections constitute our judgment and are subject to change without notice. This publication is provided to you for information

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