Soaring Costs Are Ironically Tariff-Proofing the Economy

Should we be concerned about the economy – much less the stock market – as President Trump heats up his tariff rhetoric?

Perhaps, tongue-in-cheek, we should first look at the data. Where are Americans spending their money these days – and how resilient is that spending in a world of higher tariffs?

The latest troubling trend shows that Americans are spending more on healthcare – often in the form of “insurance” that doesn’t insure against anything – than on necessities like food and housing:

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Americans now spend more on healthcare than on groceries.

U.S. healthcare continues to outpace overall inflation, thanks to high government involvement in mandates and subsidies.

We note – somewhat jokingly – that if these trends continue, healthcare spending will be the entire U.S. economy by about 2150.

Meanwhile, some forms of healthcare, such as cosmetic surgery, continue to rapidly-improve over time and costs decline.

But where the government lays its hand on the scale, all Americans are burdened with the costs of a government-run healthcare plan, while still having the appearance of a private, free-market plan.

~ Addison

50 major companies that will likely fail to survive Trump’s MAGA economy. Many have 5-star ratings. Most are “buys” per Wall Street. But they’re dead companies. Click here to see the full list.

P.S. What caused the madness of America’s healthcare system? The blame starts with FDR. During World War II, wage and price freezes and a labor shortage led to employers coming up with the idea of providing health insurance.

Today, your insurance is still tied to your job – but with the negatives of government plans and mandates that make it unwieldy. And it’s a problem that looks like it’ll get worse before – err, if – it gets better, as it’s not a centerpiece of President Trump’s Great Reset plan.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Should we be concerned about the economy – much less the stock market – as President Trump heats up his tariff rhetoric?

Perhaps, tongue-in-cheek, we should first look at the data. Where are Americans spending their money these days – and how resilient is that spending in a world of higher tariffs?

Turn Your Images On

Americans now spend more on healthcare than on groceries.

U.S. healthcare continues to outpace overall inflation, thanks to high government involvement in mandates and subsidies.

We note – somewhat jokingly – that if these trends continue, healthcare spending will be the entire U.S. economy by about 2150.

Meanwhile, some forms of healthcare, such as cosmetic surgery, continue to rapidly-improve over time and costs decline.

But where the government lays its hand on the scale, all Americans are burdened with the costs of a government-run healthcare plan, while still having the appearance of a private, free-market plan.

~ Addison

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Copper and resources are sending us a cleaner market signal than AI stocks.

Channeling Ludwig von Mises, we observe this morning that price is not just a number; it’s information. Price reflects what buyers and sellers collectively believe: demand, scarcity, fear, speculation, disappointment, future expectations and available supply.

When prices rise, and inventories fall at the same time, the message is usually straightforward: buyers need the stuff, and there is not enough of it.

A low VIX does not predict disaster. It measures complacency. A serial skeptic will read it as the calm before a storm. We shook off that feeling this morning and opted to pursue an opportunity instead.

Here goes:

A VIX reading below 15 means the market is not pricing in much near-term trouble, even though there are obvious risks still sitting in the room: Iran, oil prices, memory chip speculation, circular financing, high valuations, epic high concentrations, spiking long-term interest rates, a regime change at the Fed, a meltdown in Japan and a historic deficit and rising national debt.

Money is not flowing in a clean, straight line from outside investors to productive businesses. The firms at the top are investing in and buying from each other.

Microsoft and OpenAI are the easiest examples to follow.

Microsoft says OpenAI has contracted to purchase an additional $250 billion in Azure services, while Microsoft continues to account for $13 billion in funding commitments to OpenAI as an investment.

At this stage, it’s a stock picker’s market.