With 98 percent of the vote in, Democrat Jon Ossoff is leading his Georgia Senate race by a net margin of 0.4 percent, with Raphael Warnock having already been declared the winner of the other Georgia Senate seat. As a result, at this point it appears the Democrats will gain control the U.S. Senate (on an expected tiebraker vote by incoming vice president Kamala Harris) and with it the entire government.
With the outcome in Georgia, it’s apparent much of the nation has not only rejected Trump but has also accepted the woke culture led by Alexandria Ocasio-Cortez and the BLM organization. This means woke culture and its agenda will have complete control our nation’s economic policy.
The implications are clear. For the sixth time in the past century, the United States will adopt policies that move away from free-market classical principles.
As in the past, these policies will create stagnation at best and a serious downturn at worse. After the damage from these policies becomes readily apparent, voters will presumably seek a change and restore policies promoting growth and prosperity, as they have done in the past.
There are currently two things driving the immediate outlook for stocks: the momentum from a continued strong recovery and the flood of new money being created by the U.S. Federal Reserve. These forces are very positive for stocks.
It will take time before the destructive policies that lie ahead can be put in place. It will take additional time beyond that for the damage to appear. The timing of these policies and the extent of the damage are unlikely to become apparent for some time.
Our objective at this point is to monitor the strength in the economy and the ongoing policies of the Fed. Doing so should help us identify early signs of a shift in momentum from the growth and prosperity of recent years to the problems we will eventually have to face.