Markets Are Hitting New Highs. Why?

The Dow Jones Industrial Average is at record highs closing in on 47,000. The S&P 500 crossed 6700 this week, also a record high And the tech-heavy NASDAQ is rapidly closing in on 23000 but closed slightly lower on Friday. Meanwhile, the broader Russell 2000 index also closed out the week at a new high.

Needless to say, the stock market making new highs daily is showing broad and powerful strength, which is not only bolstering your retirement and 401k accounts, but has also made Elon Musk the first person in history to have a net worth exceeding $500 Billion, and a shot at becoming the world's first trillionaire in just a few more years!

Clearly, the illegal domestic terrorist campaigns to burn Teslas earlier this year had absolutely ZERO effect on politics or Elon's net worth. But it did help identify and put a few criminals in jail where they belong, so maybe some good came of it after all.

Why is the market soaring to new record highs, when everyone keeps talking about how horrible the economy is?

The answer to this is really simple, and very predictable. The economy is NOT in bad shape and is actually quite strong.

If we think of the world as a pan, and money as a thick liquid in the pan (hence the term "liquidity" when referring to money), that liquid can be sloshed around in the pan and can build up in one corner or another. And wherever liquidity builds up, that is where economic growth soon happens, which in turn attracts more liquidity to that corner of the global pan.

The United States has become the corner of the world where liquidity wants to flow! The main reasons for this include Tariffs, Taxes, Treasuries, and Trump. The four T's!

I wrote earlier this year that Tariffs are not the evil that certain communist-thinking economists loudly make them out to be on the news. Instead, Tariffs bring liquidity INTO the United States, where companies like Apple, NVIDIA, Microsoft, Caterpillar, Johnson & Johnson, and hundreds of others are now investing BILLIONS of dollars EACH in the United States building new factories and plants. Apple committed over $500 billion alone! Even Honda announced they are moving the Civic plant from Mexico to Indiana. This is leading to shortages of skilled labor for electricians and HVAC technicians, among many other skills, driving their wages and income higher.

Taxes are being cut across the board by the Republicans in Congress leading to higher profitability for businesses and entrepreneurs. When taxes are cut, businesses become more profitable and are incentivized to invest more to earn even more, right here in the United States of America!

Historically, increased profits ALWAYS result in more investment and production, and that is exactly what we are seeing take place before our eyes! The expectation of increased profits always results in a rising stock market.

With a reduction in the federal budget deficit brought about by extra money flowing in from tariffs, treasury bonds are rising in price, which causes interest rates to fall. Falling interest rates are now resulting in a surge of home refinancing, where equity is often pulled out and spent into the economy. As the economy grows, even more tax revenue is brought into the U.S. Treasury, reducing the budget deficits even further, which in turn lowers interest rates.

Finally, there is Trump. The policies he is implementing are very practical in helping the economy and the job markets. Those with TDS (Trump Derangement Syndrome) however are simply blind to the reality of what is happening before us.

Long drawn-out wars are highly expensive and drain the economy of funds (and lives) that can be used productively to enhance our collective standard of living. While the banks love wars resulting in higher government debt owed to them, the rest of us pay a heavy price. Wars are bad, and Trump is getting rid of them, to focus on defending our borders only, just as the U.S. Constitution intended.

President Trump is also aggressively shrinking the size of the federal government, slashing expenses and using the savings to reduce the deficit, which again leads to even lower interest rates, and more financing and refinancing.

President Trump's passage of the GENIUS Act which reimagines our money and our monetary system with cryptocurrencies is challenging the Federal Reserve system, a system directly responsible for the Great Depression, and the more recent financial crises we have seen. Trump has also eliminated the inefficient and costly policies promoting climate change, DEI, and open borders which serve only to destroy job opportunities and higher pay for American workers.

Now I of course recognize that because I brought Trump's policies and agenda into this article, there are those who will vehemently disagree with me. In their minds, any mention of "Trump" cannot possibly be good. That's just not what those folks are taught in the false narrative school systems that the President's team has also been openly challenging.

But the evidence of truth is there in the facts as opposed to the broken teachers struggling to make a living with their wrong economic mantras. The strong business environment, the soaring stock market, and a booming job market are undeniable. Each week it gets more and more difficult for the left-leaning socialism supporters to suggest the policies are wrong and not look foolish, especially when the results are undeniably there before our eyes. No matter how much the MSNBC poopy propaganda promoters tell us to look away, and that what we see is not real, America is getting richer, and the stock market is reflecting that fact as is your 401k.

But I will give them this.... I now realize Trump IS for climate change. He believes in it so strongly it has taken him only nine months to change the "business climate" from complete failure to absolute success! And based on the money flows into the United States, that success will only get better in the months ahead. We are all for a better business climate!