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.)

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!