Will The Cost Of Living Grow Faster Than Your Wealth Can? | New Harbor

Many of you are expressing real worry about this...

Many consumers are still suffering annual double-digit increases in living essentials.

So even though inflation measured as CPI is now reported to be under 3%, that flies in the face of the much higher cost increases real people experience in their daily lives.

This is causing investors to start worrying: Will the cost of living outpace my ability to grow my wealth from here?

To tackle this concern head-on and discuss strategies for avoiding that fate, I sit down in today's interview with John Llodra and Mike Preston, the lead partners financial advisory firm New Harbor Financial.

We also address the big shoes that seem to be dropping in real-time around us that could disrupt the financial markets: fast-weakening jobs data, coming interest rate cuts, and increasing worries that AI isn't delivering the ROI that Wall Street expected.

For the full interview, click here or on the video below:

---

LOCK IN YOUR TICKET! Tickets are now on sale for our Oct 19th, 2024 Fall online conference. Buy your ticket now at our lowest Early Bird discount price:

Don’t worry if you can’t watch the conference live on Oct 19th. A replay of the entire event will be sent to everyone who registered within 24 hours of its conclusion.

---

I’m so grateful to everyone who has kindly supported me by becoming a premium subscriber to this Substack. It’s making an important difference in helping me afford the substantial operating costs of running Thoughtful Money.

Premium supporters receive my “Adam’s Notes” summaries to the interviews I do, the new MacroPass rotation of reports from esteemed experts, plus periodic advance-viewing/exclusive content. My Adam’s Notes for this discussion with New Harbor are available to them below.

If you, too, would like to become a premium subscriber to this Substack (it’s only $15/mo, less than $0.50/day), then sign up now below:

---

Adam’s Notes: New Harbor (recorded 9.4.24)

EXECUTIVE SUMMARY

• The Job Openings and Labor Turnover Survey (JOLTS) for July showed a significant miss, and June's previously strong numbers were revised down to a miss as well. This marks a clear trend of deterioration in the labor market, signaling growing weakness. This is concerning because a strong labor market has been one of the key factors preventing a recession in 2023, according to the Hope framework, where employment (the "E") has held up. If the labor market continues to weaken, it may trigger a broader economic downturn and disrupt the "soft landing" or "no landing" narratives that have been circulating.

• The market is anticipating interest rate cuts at the Federal Reserve’s September meeting, with a 25-50 basis point reduction already priced in. However, the broader expectation is that there will be up to four cuts by the end of the year, and two full percentage points in rate reductions by mid-2025. The rationale behind these cuts is not entirely clear, as key economic indicators like unemployment (currently around 4.2%) remain strong, and GDP growth has been revised upwards to 3%. This suggests that the Fed may be preemptively cutting rates due to deeper concerns about potential economic trouble ahead, despite the relatively healthy state of the economy on the surface.

• Despite ongoing discussions about a soft landing for the economy, stock market valuations remain extremely high. John Hussman's market valuation metrics, which are more detailed than Warren Buffett's famous "Buffett Indicator" (market cap to GDP), suggest the market is more overvalued than at any point in history, even surpassing the 1929 and 2000 peaks. Hussman predicts that the S&P 500 may experience a 70% decline if the market reverts to valuation norms. This disconnect between current valuations and underlying economic risks indicates that investors may be underestimating the potential for a significant correction.

• As investors anticipate a period of economic uncertainty and potential rate cuts, there has been growing interest in