Investor Jeffrey Gundlach Discusses Stocks, Bonds, and Markets (Short-Lived Stimulus)

Jeffrey Gundlach provides advice and insight into market changes and what we can expect. He mentions distortions in the market that in turn create bubbles and cause market correction risks. At the moment, the market is propped up with stimulus money that will begin to wane as the money is used up. There is a difference between stimulus maintenance type money and infrastructure investment.

Experts helps us learn from the skill they have gained over time and have shown be successful ways of meeting marketing challenges. Jeffrey Gundlach is a successful businessman and investor. He owns Double Line Capital. Forbes has a write up about him HERE. He is well known within the investment world and shares his insight regularly.

He has a point in that the influx of money will be spent right away and make its way through the economic system. That doesn't mean some people won't save it but that the money will predominantly be spent and give short term boosts. There will be an inventory drain and bubbles that rise from such influx of resources (i.e. people artificially raising products/services beyond their real value). 

The indented area below is a few thoughts I had on the stimulus value in short and long term form. Its is important to remember that these are only ideas that can sometimes have an impact on how we understand issues and the way in which we solve problems. Below I wrote up a few personal ideas on maintenance vs. growth stimulus......

     Short and Long-Term Stimulus Money (Maintenance vs. Growth):

Thinking about what he is saying on stimulus money wearing off later on during the year. I agree that money focused on societal maintenance needs are likely to have shorter term impact (I'm not speaking morally here I'm speaking in terms of cash movement) than investment in key infrastructure that leads to long term innovation and growth. Inflation takes a toll on the most needy of society that often live on the fractions (See Welfare and Inflation). 

Investments in new businesses, R&D, and products that takes advantage of new infrastructure can lead to higher levels of long term growth that can influence skilled labor jobs. Manufacturing is one of those industries that impacts a wide network of supply chains and in turn has the biggest tertiary benefits to the economic system (I'm still wondering why it was so easy to outsource over the past few decades? I think we have begun to question the logic. 🤔).

 Our economic fundamentals are shifting and as the "system" moves to a more efficient state of functioning cause by digitization there will be new opportunities arising to rebalance budgets, calibrate taxes (We need to move beyond the physical concepts like the tax man coming to our villages and into a calibrated tax system that can maximize its global position. See Intellectual-HQ Tax Plan).

We see some of these changes occurring in real time. For example, if we update to the 5G economy  we speed the transference of information, economic activity, and industry development (See 5 G Economy). While investors gain advantages from new infrastructure, normal residents find other advantages such as remote work, online education. faster banking, video streaming, etc...  When we place our workers at the center of the global supply chain the benefits are are going to have increased technological and advanced skill knowledge where the highest values is created (See Welfare Theorem). 

The development of sustainable economy requires infrastructure investments followed by business investment that leads to higher growth and an expanding economic system (See Morgan Stanley and See Sustainable Development). I'm working a theoretical model by trying to justify application of an innovative development "system" in Delta County Michigan (See..DC Aerospace, Military, Tourism, Outdoor Cluster). Its not a finished work but something more to think about as an economic puzzle. Its also being edited.....see Theory of Transactional Innovation Clusters.

What we may find is that with innovation and development, reorienting the supply chains back to the U.S. as an international/global manufacturing base, and smart government policies driven by evidence based methods we can change our trajectory to again lead world development. We have to think bigger than our daily affairs and find a spot out on the horizon that we all are willing to sail toward. As we align our focus on a national level we will find things happening, new products, and new heights we are not accustomed to (COVID forced us down the trajectory with urgency through pattern change and necessity). We must create an environment that unlocks human potential (See the Hayek Road to Serfdom)