"We can’t keep going down the path of gathering more debt" by: John Sample

   A big week for earnings reports that have proved positive keep the equities markets moving north. 
   It certainly doesn’t hurt that most expect the Federal Reserve to lower interest rates, while the Executive Branch and Congress came up with a deal to extend the debt ceiling for two years. 
   With the 10-year Treasury holding at 2.05% and crude prices in the mid-$50 range, there just isn’t much in the economy to stall this market. 
   That seems to be ignored amid an almost a daily onslaught of political news and foreign unrest.
   Maybe, in fact, all the traders have moved up the coast to Long Island and are reading a good book.
   I would like to point out that Coke, United Technologies and Lockheed Martin reported better than expected earnings. 
   This follow up on big tech Microsoft beating expectations last week. 
   The next thing you know, the second-quarter GDP will come in higher than expected.
   All of this makes me question how the Federal Reserve will justify dropping interest rates to support a sagging economy. 
   I suppose it could be said that we need to move back so as not to be the outlier of high rates compared to the rest of the world. 
   While we have yet to feel the impact of the trade war, I would 
say that the rise in the dollar’s value will have an impact. 
   At least it makes out debt look attractive and, with no regard for a debt ceiling, that must be a good thing.
   I would suggest that 2% interest rates and low-mortgage rates are not hurting the economy. 
   I must be missing something but almost daily politicians seem to make it their mission to inform the public about how bad their life has become. 
   I will say though that there does need to be some attention paid to reversing the rising amount of debt this country is facing. 
   It seems Congress has no taste to cut spending so only tax increases seem inevitable. 
   While I detest taxes, you can’t keep on this path. 
   It seems certain that taxes on capital gains will be raised and inheritance tax levels will be revisited. 
   Unfortunately, we are in an election cycle and nothing will get done for a year and a half.
   So here we sit in prosperity peering at the horizon looking for that recession. 
   It certainly will come, it is just when and are you prepared. 
   I am betting that it will be after the next election. 
   If that does happen, we may finally have a chance to address the serious economic and financial concerns that we face as a nation. 
   Until then, enjoy your book.

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