Growth forecasts are continuing to be upgraded and recent outlooks now suggest world growth could hit a 60 year high in 2021 according to Bloomberg.  The reasons are well known…shrinking virus threat, massive US stimulus, and pent up demand.

Inflation is expected to rise in the months ahead but the Federal Reserve has dogmatically stated this rise will only be “transitory.”

There are several progressive Congressional members that are now adamantly stating that there is indeed a free lunch utilizing Fed statements that inflationary pressures are “transitory” while at the same time reiterating forecasts that growth in 2021 can be the greatest in 60 years partially the result of central planning akin to what is prevalent in many socialist countries.

If it was only this simple for if it were the slow or no growth communist or socialist countries would have been leading the world in economic output for decades.  History is littered with examples of lesser developed countries that had adopted similar economic plans as to the ones Congress is now pursuing, examples that have at best ended disastrously for the country’s currency, debt and economy.

Growth is being achieved via debt creation, debt creation that will be used to fund the most inefficient use of monies…government spending.  Moreover, the vast majority of these funds are not being utilized to increase the productive capacity of the country.

Utilizing a well-known analogy government is giving people fish rather than teaching people to fish via creating policies that are conducive to create a more efficient fishing pole.  The latter is economically sustainable.

No one knows the future but history is a good guide to suggest what might happen under similar circumstances.

Radically changing topics, March’s unemployment data was very strong in almost every dimension.

The economic calendar is comprised of serval manufacturing data points, trade data, another job survey and the minutes from the recent FOMC meeting.

Last night the foreign markets were closed for Easter Monday.

The Dow should open moderately higher.  The 10-year is off 3/32 to yield 1.74%.


The views expressed herein are those of Kent Engelke and do not necessarily reflect those of Capitol Securities Management. The information contained herein has been compiled from sources believed to be reliable; however, there is no guarantee of its accuracy or completeness. Any opinions expressed are statements of judgment on this date and are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated or projected. Any future dividends, interest, yields and event dates listed may be subject to change. An investor cannot invest in an index, and its returns are not indicative of the performance of any specific investment. Past performance is not indicative of future results. The material provided in Daily Market Commentaries or on this website should be used for informational purposes only and in no way should be relied upon for financial advice. Please be sure to consult your own financial advisor when making decisions regarding your financial management. Members of FINRA and SIPC, Capitol Securities Management is a privately owned full-service retail brokerage and investment advisory firm headquartered in Richmond, Virginia. For nearly 30 years, we have been serving the needs of our investors. Today, more than 200 Capitol Securities Management investment professionals and support staff serve approximately 18,000 customer accounts from Southern Florida to the New England coast.