As we approach Labor Day many are looking forward to the changing seasons, football and cooler weather. Goof that I am, I am thinking about what the day means. A celebration of America’s work ethic and thrift.

In the past I was always proud of the fact that with hard work and determination you could accomplish anything in our great country. I saw the backbone of America when I was in high school and college and worked at Westclox and American Nickeloid- just two companies that provided good-paying jobs that would allow for a single wage earner to support a family.

As time went on, many of these factories closed up and moved to locations with cheaper labor- like Westclox initially moving to Georgia prior to moving to Mexico.

As my children were growing up it became clear that the world I had grown up in was rapidly changing. My advice to them was to “do what you love because if you don’t love what you do you won’t be good at it”. In addition, “You better get really good at something because the days of being able to do menial jobs and survive are over”.

My kids are now all grown adults. I am proud to say that all four of them heeded my warnings and are excelling in their careers. I feel fortunate that their time came along just prior to our current state of affairs. While my advice would be the same, I believe that carrying it out today would be FAR harder than it was even 10 years ago.

The main reason for the hardships faced primarily by those starting out is the money “printing” that has hollowed out our economy and has replaced American’s hard work ethic with an expectation of entitlement.

The very act of “printing” money has not only hollowed out our economy but actually undermines anyone who is earning wages. Just think about this:

The USA is going into over $1 Trillion in debt every 100 days. (US Treasury)

For a person earning $25.00 per hour and working 40 hours per week = $1000.00. This very act of conjuring up a trillion dollars is equal to 1 BILLION weeks of work for that person- or in other words that person would have to work over 19,230,769 YEARS to equal what the few strokes of a mouse can conjure up in mere seconds. It would take 20 MILLION workers making $50,000.00 per year to equal that few mouse clicks. Of course, the person who is engaged in productive work creates VALUE. The “printing” just gives the illusion of value where none exists. It allows buying where, without the conjuring up of cash there would be FAR less demand and FAR lower prices. In addition to creating NO VALUE except for the very few with the privilege of getting something for virtually NOTHING it creates the perfect setup for INFLATION which is an increase in the money supply and too much money chasing too few goods. The setup is that while artificial demand is being created, the goods necessary for our survival are not being produced in enough quantity.

While wage-earners are out creating VALUE there are those near that money spigot that get the cash first and buy assets- creating higher prices because of the artificial demand created by the artificial money. It is no surprise that inflation has raged and the American dream of home ownership, a nice car and individual freedom have vanished for most of the upcoming generation.

For decades now we have been conjuring up cash (DEBT) to buy all sorts of goods. In the past, we would have had our own productive capacity. We could trade hard goods for hard goods. For a long time, as the US dollar maintained purchasing power, most countries were ok with trading oil, food, clothing, etc. for those dollars. These days are rapidly ending. The rest of the world has caught on to the fact that America has become lazy, complacent, and other countries are tired of our bullying, arrogance and are now uniting to put an end to our financial dominance.

I believe that those “in charge” know the end of our current system is at hand and are trying to make a transition to the new system as seamless as possible. I also believe that these wars are also meant to let others know we are not willing to give up our financial dominance without a fight. The sad part happens to be that we don’t have the manufacturing capability to fight a conventional war anymore. It is highly likely that the ceasefire between Iran and Israel was because both sides were out of missiles or would have been shortly.

Money printing, get-rich quick schemes and gambling have replaced hard work and thrift as the norm in America. While in China the younger generation aspires to becoming engineers, astronauts, doctors, etc. I am hearing the most sought after “career” amongst the youngsters in the USA is a social media influencer. That says an AWEFUL lot.

As Labor Day approaches, I salute the wonderful hard-working Americans who still give 100% even though the deck seems stacked against them at times. I also hold out hope that as times get tougher so does our resolve to be better and more efficient.

I also hold out hope that many of us who have been fortunate enough to amass assets over time plan well and hold assets that will hold VALUE as prices ultimately will reflect reality. That is not at all the case today. I look for big changes in the near future. Those planning correctly could have major opportunities for life-changing wealth while the majority will probably be going over the cliff when reality strikes.

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.

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