We have been saying for a while that inexorably high energy prices are part of “The Secular Drivers of Inflation.” The article excerpted below from today’s WSJ affirms our view. The point is simple. US Oil companies aren’t going to use excess cash to drill more because their investors want the cash returned to them. That isn’t going to change, not in the face of the energy transition. The unprecedented pricing power of the Saudi’s exists not because there isn’t spare US capacity, but because there isn’t really cheap spare capacity.

We have been saying for a while that inexorably high energy prices are part of “The Secular Drivers of Inflation.” The article excerpted below from today’s WSJ affirms our view. The point is simple. US Oil companies aren’t going to use excess cash to drill more because their investors want the cash returned to them. That isn’t going to change, not in the face of the energy transition. The unprecedented pricing power of the Saudi’s exists not because there isn’t spare US capacity, but because there isn’t really cheap spare capacity.

Equity futures are under pressure following yesterday’s Fed meeting. My view is that the reason for the weakness in futures this morning has more to do with the upside breakout of the Ten-Year Treasury versus anything the Chairman said at his press conference.

We may soon find out just how embedded secular inflation fears have become.

The surging momentum of populism and subsequent polarization is making it harder for our American democracy to accomplish the goal of the prudent stewardship of our current economy and our longer-term economic well-being.

On July 20th, the CBO published, “The Long-Term Budget Outlook Under Alternative Scenarios for the Economy and the Budget”. How bad will our deficits and national debt get? We have no idea.

Stephanie Kelton's book, The Deficit Myth, challenges the belief that deficits matter, arguing that as a sovereign nation, we will never run out of money. However, the current state of the US economy, with low potential GDP and tight labor markets, suggests that deficits do matter, and measures need to be taken to reduce them and balance monetary policy.

20% of GDP growth in Q1’23 came from manufacturing construction, a subsector of the economy that normally accounts for only 1% of GDP. But there will be negative unintended consequences to so much government directed investment in the long-term.

Tim and Drew go over the outlook of oil and gas markets. For more from Tim Pierotti, WealthVest's Chief Investment Strategist subscribe to our podcast WealthVest: The Weekly Bull and Bear at https://shows.acast.com/the-weekly-bull-and-bear or wherever you listen to your podcasts.