One cannot underestimate the immense gravity of the conflicts with China and Iran, so we start with what we believe is an incisive article on those two conflicts. Watching the Fed is starting to feel like a sophisticated financial soap opera, but hey it’s our job! For the first time, we are starting to think that the idea of a wealth tax could get some traction and explain why.
Please click on Read More below so that you don’t miss some of the most interesting notes. “I Got This!” is my favorite, an inspirational story of a young golfer with a can-do attitude. Non-golfers may love it as well. We also touch on other topics like proposals to cancel student debt, important new research about the Mediterranean Diet, the surprising link between coffee and migration, more on Facebook’s proposed cryptocurrency, opportunity zones in Maine, and a concerning article about digital privacy and internet browsers. To the links!
- Trump Takes on China and Persia: The U.S. is clashing with two ancient civilizations at once with much at stake. Thomas Friedman offers his perspective. His tone may be overly caustic for some, but the piece is well worth reading for the insights. New York Times
- Billionaires Say “Tax Us”: Several Democratic candidates have proposed taxing the very wealthy in order to fund their preferred policy initiatives. Initially, it felt like a non-starter, more of political strategy than a serious policy option. But what if the idea gains positive traction among some of those who would pay the tax and believe it would be in our national best interests? Does the policy debate start to shift to “why not”? Some of our billionaires are now saying “tax us”. CNBC
- Federal Reserve Intrigue: Interest rate decisions aside, there are some interesting stories being played out at the Fed. To what extent will President Trump go to influence Fed decision-making and how will Chairman Powell, wary of attacks on the Fed’s independence, respond to threats? Will Trump break with precedent (and possibly law) and attempt to fire or demote the Fed Chairman? Trump and Powell ostensibly want the same thing, a growing economy. Trump needs it for re-election, and the Fed now openly embraces its role in facilitating economic growth. Both are concerned about the current risks (trade conflicts, slowing manufacturing, etc.). Where they differ is that Powell wants the Fed to be “data dependent” in its decision-making, which means waiting until the data is clear before lowering rates. Trump wants the Fed to act pre-emptively by undoing the last rate cut and cutting even more. Axios Minneapolis Fed CNBC
- I Got This! This one speaks for itself, but you will have to watch the video to get it. Listen closely to hear Amy Bockerstette’s response to Gary Woodland when he offers to hit her ball out the bunker. That immediate, confident response sums it all up! Golf Digest
- Canceling Student Debt: Another big policy idea coming out of the Democratic primary is canceling student debt. It is too soon to tell if this will have traction. The cost would be astronomical, but it would also unleash enormous economic purchasing power in our country in a large segment of our society dealing with high debt levels. As an aside, what impact would a proposal have on voting patterns if a candidate gets nominated that favors student debt cancellation? Bernie is all in. Washington Post
- The Most Effective Diet for Reducing Bad Fat: Apparently, liver fat is especially bad due to a high correlation with metabolic syndrome than visceral fat. The good news-the already highly regarded Mediterranean Diet is especially effective at reducing liver fat. Forbes
- Maine Opportunity Zones: Expect to hear more about Opportunity Zone investing, a new tax advantaged program that could benefit some investors. Each state is authorized to designate a certain number of low to no growth areas for federal tax advantaged investing. This article talks about this program in Maine. Portland Press Herald
- Coffee and Migration: Plunging coffee prices have made it uneconomic for Guatemalan farmers to grow coffee. What do some want to do? Migrate to the U.S. Washington Post
- Goodbye Chrome: This article suggesting that Chrome is nothing less than digital spyware and that Firefox is a much better browser choice has gotten great attention in the digital world. I fear that it is going to be nearly impossible to get the digital privacy genie back in the bottle. Washington Post
- Facebook & Cryptocurrency: We mentioned last week that Facebook plans to introduce its own currency, Libra. My first thought was “well, that’s interesting”. My second thought is a question: What if Amazon decides to introduce a cryptocurrency? The Fed better not fall asleep on this one. CNBC
Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.