It deserves a second look because velocity is key to everything. It was already falling before the pandemic and in 2020 dropped to the lowest level since 1946. Significant inflation is hard to imagine unless velocity turns a lot higher. This matters for interest rates, currencies, and many asset prices.



The stocks that make up the benchmark S&P 500 Index were on track to record their highest price-to-earnings (P/E) ratio in decades. The P/E ratio was up from 20.6 at the start of 2020 to 30.3 last month.


US Economy


  • The fiscal package proposed by President-elect Biden is almost as big as the CARES Act.



  • Apartment rent collections dipped last quarter.



  • Food inflation is set to climb.
  • December retail sales were disappointing as the pandemic took its toll.
  • Americans are concerned about their financial situation.
  • Capacity utilization continues to improve.
  • The NY Fed’s regional manufacturing index (Empire Manufacturing) showed lackluster growth this month.



  • US housing price gains accelerated going into 2021
  • Consumer delinquency rates have been creeping higher in recent months.
  • Business inventories continue to recover.
  • Business spending has been focused on inventories rather than CapEx.
  • Inflation expectations keep climbing.
  • What is the total cost of the pandemic?



  • Mortgage applications to buy a house remain robust.
  • The NAHB homebuilder optimism surprised to the downside, declining for the third month in a row. Nonetheless, the sentiment level is still elevated.
  • Rising costs of construction materials have been an issue for many homebuilders.
  • By holding down rates, the US central bank has allowed the federal government to massively increase its debt without incurring higher interest expenses.
  • The Philly Fed’s manufacturing report showed solid factory activity in the region, exceeding market expectations.
  • New orders and employment indicators jumped.
  • The report also showed manufacturers facing rising industrial commodity price, which they are passing on to their customers.
  • US initial unemployment claims remain elevated.
  • Residential construction activity was robust in December, driven by single-family units.
  • The COVID situation shows signs of improvement.





  • That’s the good part, but there’s more that is less comforting. The CDC unfortunately confirmed the UK (B117) variant strain. They expect it will account for 50% of US cases by March.

This does not mean that the B117 variant will replace 50% of other cases. It means the significantly more contagious B117 will catch up through an exponential rise in the next few weeks.

  • Bitcoin took a hit



  • Lockdowns continue to pressure growth.





Officially, US inflation rose 1.4% last year. But that’s an “average” based on numerous assumptions. Your personal inflation rate depends on how you spend your money. This graph breaks down the change by selected categories.



University of Michigan Consumer Confidence


This chart shows consumer confidence by political party affiliation. It clearly shows something we already knew: Economic optimism or pessimism depends highly on whether one likes the party in power. In late 2016, Republican confidence surged and Democratic confidence plunged. Now the opposite is happening.



US Retirement Survey


In a recent survey by Simplywise:

Despite buoyant markets, millions of Americans faced unprecedented financial hardship caused by COVID-19. It has upended what work, income, and employment opportunities look like, as well as retirement. It has eaten into savings, forced people into debt, and created unprecedented levels of housing instability. And while the rollout of vaccinations gives some hope, continued lockdowns coupled with the change of power in Washington and current political unrest are causing many to continue feeling uncertain about the future. Yet certain populations, including seniors, people of color, and lower income Americans, have been disproportionately impacted both by the virus itself and the instability in its wake.” – SimplyWise


Here are some of the key findings:

  • 55%of people are more concerned about retirement today than this time last year.
  • 44%of Americans worry they’ll never be able to retire—an all-time high.
  • 23%of Americans don’t have any retirement plan.
  • 51% of Americans will need a 3rd stimulus check within the next 3-months.
  • 48%of White Americans could not last more than 3-months off of their savings.
  • 25%of Americans in their 60s could not last more than 3-months off their savings—an all-time high.
  • 75%of people laid off due to COVID-19 couldn’t come up with $500 cash.
  • 45%of Black Americans now fear falling behind on their rent or mortgage compared to 44% of Hispanic Americans and 28% of White Americans.


Janet Yellen


President-elect Joe Biden’s pick for Treasury Secretary, Janet Yellen, is set to testify today (last Tuesday) before the Senate Finance Committee, which is considering her nomination as key member of the cabinet. She’s set to call for “big” action on the COVID-19 pandemic after Biden unveiled a $1.9T economic stimulus plan last week.

Yellen served as top White House economist in the 1990s and Fed Chairwoman in the 2010s, meaning a confirmation would make her the first person to achieve such a trifecta of economic leadership roles.

Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now – and long-term scarring of the economy later. Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job,” Yellen will say in her testimony. “Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.”

Yellen’s approach to financial regulation and protecting the economy against systemic risks is also likely to differ from her predecessor’s. Two years ago, Yellen co-signed a letter urging Treasury Secretary Steven Mnuchin not to move forward with plans to relax oversight of big financial firms, and last year, she called for a “new Dodd-Frank.” Along with the Biden administration, Yellen has emphasized the need to create “equitable growth” and could use the tools of the Treasury Department to combat climate change and rebuild regulatory institutions like the Financial Stability Oversight Council.

A doubling of the national minimum wage to $15 per hour (from $7.25) is also part of the Biden team’s proposals… and more state and local aid, too… and more jobless benefits.

Two dangerous ideas: that fiscal deficits don’t matter, and that no matter how much debt is outstanding, we can effortlessly, safely, and reliably pile on more.





  • Big tech’s revenues by region



  • Total US election costs:




  • Business taxes by state





All content is the opinion of Brian J. Decker

Decker Retirement Planning Inc. is a registered investment advisor in the state of Utah. Our investment advisors may not transact business in states unless appropriately registered or excluded or exempted from such registration. Decker Retirement Planning Inc. is an investment advisor registered or exempt from registration in each state Decker Retirement Planning Inc. maintains client relationships. We can provide investment advisory services in these states and other states where we are registered or exempted from registration.