PEORIA MAGAZINE November 2022

Britain’s new prime minister announces tax cuts to stimulate growth there – even in a high inflation climate – and the global reaction is swift and unwelcome. To what degree do we control our own economic destiny in the U.S., or are we at the mercy of the world no matter what we do? JL : I am very hopeful for the future. We humans are very resilient and resourceful and regardless of what happens, we will always seek to improve our lives and society. And yes, we are in this thing together. So when one of our neighbors and trade partners halfway across the globe gets sick with inflation, goes to war, and/ or falls into recession, we feel it here at home too. There are many positive attributes to globalization, including efficient resource use and comparative advantage, but the downside is that we are nowmore interconnected. But there is no alternative. It is a historical truism that closed economies are more likely to go to war, have slower economic growth, and have widespread poverty.

US months supply of new single family houses. (I:USMSNSFH) From Compound @CharlieBilello

jobs report was not all good, and in fact provided some fairly scary aggregate supply data points that we will have to grapple with going forward. Notably, labor productivity and labor force participation rates declined, both of which could cause prices to rise further. Also, fiscal stimulus at the state level just doesn't stop either. Several states including California (i.e. California's Middle Class Tax Refund program) and Illinois (i.e. Illinois Family Relief Plan) have just sent out another round of

checks, most of which will be spent, thereby increasing aggregate demand and inflation. The Federal Reserve will respond. Their only tool is quantitative tightening. Unfortunately, monetary policy is a blunt tool with significant lags. PM : Inf lation in the Eurozone has topped 10%, the highest recorded since the currency there was created. Some nations are above 20%, and Germany is at its highest rate since 1951. Great

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NOVEMBER 2022 PEORIA MAGAZINE 105