Chart Talk: February 8th, 2024


The Purported Demise of the US Economy are GreatlyExaggerated

The calls started last year around March, after a difficult2022 for the financial markets.  Callsfor gold.  Concerns that the US Dollarwas on its way to no longer being the world’s reserve currency.  That China was going to overtake the USEconomy to become the most dominant economy in the world.  That the glory days of the post-WW II UnitedStates booming economy were over, giving way to the BRICS nations (Brazil,Russia, India, China, South Africa, Egypt, Ethiopia, Iran, and the United ArabEmirates), poised to assume a leadership role as the world’s pre-eminenteconomic bloc.

Fast forward to today – China has gone from nearly 20% ofworld GDP in 2015 to 10%; domestic personal consumption is slowing; two oftheir largest property developers are in bankruptcy with more debt than all theDow companies combined; 18% of the population of China is over 60 years old;median household disposable income is just over $5,000 USD.  China is confronted with all of these issuesalong with slowing population growth – in fact, last year a decliningpopulation (see chart below), all, a result of their “one child policy” whichwas implemented by the Chinese government in 1980 until rescinded in 2016.

Nonetheless, China remains and will remain a global economicforce as it is still the second largest economy in the world per GDP with apopulation of 1.4 billion people.  Whatwe are reminding readers is that the reports of the death of the United Statesare greatly exaggerated, indeed sensationalized for whatever reason – at timeswith good intentions and at times not so good. Unequivocally, the United States remains the most transparent,capitalistic, and innovative country in the world, which will in turn, for theforeseeable future, make it the premiere place for investors to place theirmoney.

This presentation is not an offer or solicitation to buy or sell securities. The information contained in this presentation has been compiled from third party sources and is believed to be reliable, but its accuracy is not guaranteed and should not be relied upon in any way, whatsoever. Fagan portfolio characteristics and holdings are subject to change at any time and are based on a representative portfolio. Holdings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown. This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities listed.

Additional information including management fees and expenses is provided on our Form ADV Part 2. The actual return and value of an account fluctuate and, at any time, the account may be worth more or less than the amount invested. Bond Investments are affected by interest rate changes and the credit-worthiness of the issues held in the portfolio. A rise in interest rates will cause a decrease in the value of fixed income positions. Past performance results are not indicative of future results.”

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