Regulatory Monstrosity

~~ Lau Vegys, Doug Casey’s Crisis Investing

The federal government is out of control.

If you’ve been with us for a while, that’s not exactly news to you. But if you ever needed a visual to show someone who doesn’t get it, here’s one. Take a look at this week’s chart below—it shows the relentless growth of federal regulations over the past 70+ years.

This monstrosity has ballooned from under 10,000 pages in 1950 to a staggering 190,260 pages by 2023. That’s thousands upon thousands of pages of rules, dictates, and mandates, crafted by unelected bureaucrats, cramming their tentacles into every nook and cranny of American life and business.

And the costs are staggering. According to a report by the Competitive Enterprise Institute, federal regulations cost the U.S. economy $2.1 trillion per year. That’s an invisible tax of about $15,000 per household. And guess who shoulders this burden? That’s right—the American consumer, worker, and entrepreneur.

Now, if you remember, $2 trillion also happens to be the amount needed to balance the budget today—and it’s the same figure Musk himself claimed he could cut from federal spending through his DOGE initiative (the Department of Government Efficiency).

Of course, as I mentioned in a piece last month, DOGE isn’t an actual government department. It’s just a Federal Advisory Committee with no real power to act directly (except to provide recommendations and advice to the President and federal agencies).

So, as much as I’d love to see a smaller government, a reduced deficit, and a less expensive foreign policy (all desperately needed given the state of U.S. finances), I’m not holding my breath for DOGE to deliver these changes.

Still, whether it succeeds or not, the goal is undeniably noble.

Because this regulatory explosion you see above isn’t just about the economic toll. It’s about lost freedoms, crushed innovation, and the constant distortions it forces on the market. Every new page added to this monster is another blow to liberty, another barrier for hard-working Americans, and another chain on the invisible hand.

Have a great rest of the weekend!

Lau Vegys

~~ Lau Vegys, Doug Casey’s Crisis Investing

The federal government is out of control.

Still, whether it succeeds or not, the goal is undeniably noble.

Have a great rest of the weekend!

Lau Vegys

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.

Overspending during periods of rising ASPs is self-destructive. For most products, today’s ASP increases result less from natural demand pull and more from supplier-enforced discipline. If memory makers treat them as justification for a capex binge, they will repeat past mistakes and trigger another collapse.

The $50 billion bull case for WFE in 2026 rests on a faulty assumption. Lam and AMAT may benefit from selective investments, but the cycle-defining upturn Morgan Stanley describes is unlikely.

Investors should temper expectations. If history repeats — and memory markets have a way of doing so — the companies that preserve pricing power will outperform, while equipment suppliers may find that the promised order boom never fully materializes.

Europe’s GDP has flatlined over the past 15 years, against a doubling in GDP for the U.S. and even bigger GDP gains in China.

While the U.S. leads the world in AI spending, and China leads in technology like drones, what does Europe lead the world in? Regulation.

They spend more time penalizing U.S. tech firms for regulatory violations than encouraging their own tech ecosystem.