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A Personal Note from Cam – Dated May 20, 2021

A Personal Note from Cam – Dated May 20, 2021

May 20, 2021

A Personal Note from Cam – Dated May 20, 2021


While 2020 was a year to forget in many respects, it is important to remember that from an economic perspective, it could have been a lot worse.

In my past Notes, I have attempted to create a consciousness that we should never confuse the markets with the economy.

It seems to me that today politicians and much of the media love to call out Wall-Street versus Main Street.

Markets reaching new highs should not be an end-all. 

America (all of us) reaching new highs should!

I continue to believe that a growing economy is a job creating economy.  It transcends the investor class and provides better sustenance to the labor class.

Uncontrollable runaway inflation, deterioration of our U.S. currency value, and excessive debt – none of these, individually or collectively, are good for our economy.

At worst, they would destroy our American standard of living and our leadership among developed nations.

In my opinion, we must remember that there is no other developed nation today that is in better shape fiscally, monetarily, or technologically to lead themselves out of the vestiges of the COVID-19 pandemic and recover its footing for sustained growth and recovery then America is.

Reopening of the U.S. Economy

During the past five months, many of Trevor’s and my conversations with you have focused on the ultimate reopening of the U.S. economy.

The latest round of inflation data shows that the Consumer Price Index (CPI) surged 4.2% in April, per the U.S. Labor Department.  It was the fastest year-over-year rate of change in more than 12 years.[1]

When I pause to reflect on this increase in inflation, I am not at all surprised. Let me explain.

First, the media is obsessed with its reporting.

Instead of reporting on the ‘historical cause and effect’ when massive amounts of money have been previously pumped into our economy, the media has ignored what the Fed told us last summer they would be doing.   Months into the COVID-19 pandemic, the Fed told us they would allow inflation to float higher in order to achieve lower unemployment and hopefully undo much of the damage that the pandemic brought on the broad American economy.

Since March 2020, with the passage of the $2.2 trillion CARES Act, which Congress passed by huge bipartisan majorities, the federal government began its mission of pumping stimulus into our economy…the more, the merrier, as the saying goes.

As the CARES money ran out, and after much partisan dickering, in the closing days of the Trump administration, about $900 billion of stimulus was created in a second relief package.[2]

Enter President Biden.  In its first major legislative achievement, the Biden administration managed to get the $1.9 trillion American Relief Plan passed in March with no Republican votes.  The plan is giving the economy a big shot in the arm right now.[3]

So, over an approximate 12-month period of time, the U.S. federal government pumped $5 trillion in federal fiscal support into the economy in an effort to keep millions of families afloat, keep people in their homes, help save small businesses from failure and help prevent COVID-19 from bringing on another Great Depression.[4]

At the same time that the federal government was pumping serious amounts of money into our economy, government-imposed bottlenecks (at the federal, state and local levels) limited production and investment at the business and corporate level.

An oft-forgotten effect of rising inflation is rising prices on not only consumer goods and services but also on the production costs for companies.  Just as the CPI measures changes in prices from the perspective of consumers of finished products and services, the producer price index measures price changes from the perspective of sellers at all stages of production.

A year ago, energy prices collapsed. Production cutbacks followed.  Now, energy demands are once again beginning to soar as people in America and worldwide begin to move around.  Have you noticed how elected officials are responding to price increases associated with energy?

Last year we also began to hear about semiconductor production shortages impacting the supply chain.

As is the case with energy prices, reports about a lack of semiconductors are driving price increases in multiple goods and creating production slowdowns with other goods.  No doubt exists in my mind that semiconductors are now one additional lifeblood of the global economy.  Ultimately manufacturing will increase to meet demand and what is now in short supply will no longer be.

My point is that it is clear to me that our U.S. economic demand is currently outstripping supply.

States are fully reopening and dropping COVID-19 restrictions faster than global supply lines can keep up for now.  But this demand-side economic pressure will eventually relent as businesses and supply lines catch up.

In other words, the current bump in inflationary pressure in my opinion is temporary.  To put it another way: This, too, shall pass.

But what if it doesn’t?  At this moment, the mainstream media keeps telling us that everyone is worried about sustained sky-high inflation.

Let me pose this question: If the economy is truly recovering, why is everyone worried about long-term inflation?

Is it because of the amount of total government stimulus and unemployment benefits being offered today?  Those will only last so long, and there is no way another round of stimulus is going to pass Congress in my opinion.

Limited material supplies?  The only way shortages will last is if businesses themselves do not rise to meet demand.  We already know that they are rising to the occasion, albeit cautiously, due to lingering COVID-19 fears.

And here, we hit on the real boogeyman: COVID-19.

All things being equal, I believe we are seeing exactly what the Federal Reserve says we are seeing: a transitory bump in inflationary pressures exacerbated by extremely poor year-over-year comparisons.

For example, if you have “nothing” and get just one of “something,” that is a 100% increase.  Please remember that economic growth in 2020 was nonexistent, so any growth this year and next year will look massive.

If we are really in an economic recovery and COVID-19 is no longer the boogeyman of the past, we have nothing to worry about.  Supply will catch up to demand and everything will even out. Inflation concerns will evaporate and you should be rewarded for sticking to your financial plan and existing investment strategy.

As I was reminded during a conversation yesterday, if we are not in a true economic recovery, and this growth is all smoke and mirrors fueled by premature reopening’s and massive stimulus spending, well, then inflation will not be a concern there either. Demand will decline as reopening’s are reversed once again and stimulus will dry up, taking inflation and economic growth with it.

I believe that the only way we will see sustained long-term inflation is if economic growth continues at its breakneck pace and businesses (for whatever reason) do not invest in supply lines and materials to keep pace with demand.[5]

A Focus on Human Capital

I believe each of us has something to be grateful for at all times.  In this light, I received a note recently from a dear couple after they read my book, What Matters.

I had given them “an assignment,” which was to reflect on their biggest hopes for their children and grandchildren and the impact they would like to focus on intentionally while guiding and mentoring the human capital of their family in the year ahead.

This is what they shared with me:

We believe that our impact on other people has been bigger than we thought.

We believe that someone still giggles when they think of a funny thing we previously said.

We believe that someone still smiles when they think of a past compliment we’ve given.

We believe, through our work and service, that we are silently admired by others.

We believe that the advice we have given has made a difference for many people.

We believe the support and love we have offered others has helped make someone’s day.

We believe that our input and opinions have made someone think twice.

We believe that our very existence has made a positive difference to our family, and for this we are truly grateful…

How might these reflections impact your most important relationships in the coming days and weeks?

On behalf of Trevor and our entire team, I wish you continued abundance.

Yours truly,



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[1] Joseph Hargett. Great Stuff. May 12, 2021.
[2] The Wall Street Journal. Welcome to Joe Biden’s Boom Economy. April 22, 2021.
[3] Ibid 2.
[4] Ibid 2.
[5] Ibid 1.