Hopefully you have heard of Fort Knox – it is one of the places where the US government stores gold. At one point dollars could be exchanged for gold or the currency was backed by gold. President Nixon took the US off the gold standard and the price of gold went up. Most of Fort Knox’s gold was filled up with golf for $35 an ounce, presently gold trades in the range of $4,400. This implies if the US government needed to it could sell some of its reserves, and wait till the economic cycle goes down and then replenish the gold at a lower price, but it would always have gold in Fort Knox. The same idea applies to the strategic oil reserve.

In an article by Timothy Gardner, Arathy Somaskekhar and Anushree Mukherjee of Reuters, in Texas and Louisiana are salt domes that have been mined and there are 60 of these domes which allows the US government to have a Strategic Petroleum Reserve (SPR). At one time oil and gas was relatively inexpensive and then the countries of OPEC stopped the flow of oil and gas. Prices rose and the US decided it needed a SPR to ensure there would be no more shocks to domestic supply of oil and gas.

Over time, the SPR sits in the salt domes and waits.

When the Iran started, oil and gas flowed through the Strait of Hormuz, and however the government of Iran realized it could stop traffic to put pressure on the US to come to an end to the war. The governments of Europe and US said until the war is over, they would release stockpiles of oil and gas to ensure countries could still function, albeit with a higher oil price. The reserves have been released.

The reserves are the lowest since 1982, holding 289.7 million barrels of oil. Since the war started governments have released 400 million barrels with the US contributing 172 million

Siddharth Misra, a professor of petroleum engineering at Texas A&M University, noted the as oil is released, water comes into the salt mines, which implies the absolute physical floor for the SPR is 70 million barrels, however the practical minimum for safe operations is close to 250 million barrels.

It was announced by President Trump, the oil from Venezuela will fill up the SPR, however there are problems with the solution. Most of Venezuelan oil is heavy crude, the oil in the salt mines is light crude. The heavy crude needs to come from Venezuela, be refined and then go to the salt mines. President Trump said the new company will be 65% owned by the US government departments would amount to 1/5 of the Venezuela’s proven crude reserves.

Domestic consumption of oil in the US is 20 million barrels a day.

Kevin Book, an analyst at ClearView Energy Partners, believes whether the US ships Venezuelan oil directly to the SPR or sells it to fund purchases of US oil for the reserve, the process to fully replenishment will take years.

Another aspect to note is once the reserve falls below 252.4 million barrels, there are laws on the books that prohibits the President from ordering routine small drawdowns. It the President declared a major emergency, drawdowns on reserves could happen.

Similar to the rest of the country, aging infrastructure means upgrades need to be done but have not started. The GAO sound that the SPR’s ability to quickly fill and drawdown oil is at risk due to problems including construction outages.

If there is no drawdown at the SPR, supply and demand will dictate the price of oil.

Linking to dividend paying stocks, in every commodity markets there some long time holders of the commodity that can release the commodity when prices are high and cut back when prices are lower. For example, mining companies, there is the metal in the ground, but at what price does it need to be before the miners take the mineral out of the ground? In the past we have seen companies specialize in going through massive tailings because the price of the mineral went up. Smaller deposits can be profitable if the price is high, if the price is low there are not worth the effort. In addition, for some companies that have been in business a long time, they have access to relatively inexpensive minerals that can be sold when prices go up, they are just carried on the books as low value assets.

There are more questions than answers, till the next time – to raising questions.

It is 2 years into the President Trump economy and some parts are doing well and others not so well, particularly with regards to government policies.

In an article by Tony Romm of the New York Times News Service, when President Trump was elected his priorities were to defeat the scourge of inflation and slash government spending which Republicans saw as the root of the problem.

The problem is the President’s policies have worsened the problem.

The first policy that did not help inflation was the tariffs or the trade war. When the Treasury was told by the Supreme Court to repay those who paid the tariffs, the money did not go to foreign countries it went to companies because the company that imports the goods has to pay the tariff or consumers were paying the tariffs. In addition, the President might have given companies incentives to make more of the goods in America but they did not, for one of the things the President’s Big Beautiful Bill did was lower corporate income taxes. He could have lower corporate income taxes if the good was made in America, but there was not restrictions and companies examined how much would it take to make in America or outside of America? They paid the tariff. In addition, if you watch You Tube clips on manufacturing, you will see more and more robots or automation being used, what jobs were coming back?

The war in Iran resulted in the closure of the Strait of Hormuz which oil and gas flowed from the Gulf of Arbia. All the countries in the Gulf have developed a variety of value-added products which were shipped through the Gulf. The movement stopped and prices went up and have stayed up. The value-added products have gone through the supply chain and there are real shortages, so prices are higher.

Inflation is running at 3.7%, the President whose business was in real estate was looking for interest rates to fall to 2%.

Sarah House, a senior economist at Wells Fargo, projects inflation will end the year at 3.5%. There is a gap between what consumers are taking in and how fast the money is going out the door.

Consumers are using credit cards more or there is more credit card debt which is good for VISA and Mastercard. Consumers are using credit cards for groceries and at some point the cards need to be repaid or groceries become even more expensive.

Kevin Warsh, the Chair of the Federal Reserve wants to cut interest rates, but fighting inflation is more important so he has not cut rates.

It turns of the deficit, the national debt went over $40 trillion. The Republicans used to be about cutting deficits but everyone in Washington likes to spend and wars are expensive. 2 years into the administration and Wall Street is reacting by pushing bond yields higher. Secretary of Treasury Scott Bessent announced a rare move to buy more longer-term government bonds and issue short term bonds in the hopes interest rates fall. He believes the administration is creating productive assets for future growth, which will paying taxes all the way down the line. I like to think that more of pulling the back of slingshot and creating potential energy that becomes kinetic.

Linking to dividend paying stocks, the economy stupid is the issue of the midterms, and the President has issued more executive orders than any President in history. He has also seen the bulk of them shut down from the courts because they overstep his ability, the courts want Congress to pass legislation to change and the Senate to ratify the changes. That takes time and we will see what happens in the midterms. Meanwhile companies are trying to keep a reasonably low profile so politicians on both sides have no opinion of their good work.

There are more questions than answers, till the next time – to raising questions.

It is wonderful to have dreams; America was built on them. Sometimes the dreams come true and other times they remain just a dream. One of the most successful IPOs was SpaceX and it is dreaming big.

In an article by Joey Roulette of Reuters, SpaceX unveiled plans to build its largest rocket launch complex in southern Louisiana to transform coastal wetlands into a critical base for the company’s Starship and AI satellite launch ambition. The site is on Pecan Island which is southwest of Lafayette. SpaceX President Gwynne Shotwell hopes to eventually launch thousands of Starships flights a year.

Construction is expected to start in 2028 with the ability to launch in 2029.

The self-sustaining space port will include its own methane production for propellant, power generation, deep water shipping capabilities to transport Starships from Texas, vehicle processing facilities and maybe an airport.

The 125,000-acre site is a marshland and equivalent to 8 times the size of Manhattan. The idea is to have a number of launch pads surrounded by greenery.

Years ago, there was a movie starring Julia Robers called Pelican’s Brief, not surprising Pecan Island is a protected hub for dozens of migratory bird species travelling through the Western Hemisphere. The other issue is the Gulf tends to have hurricanes and the marshlands help protect the inland residents.

SpaceX has a number of sites in the US including in Boca Chica (located near the Texas, Mexican border) where they both launch and build the rockets. In Cape Canaveral, Florida SpaceX is building 2 Starship pads next to its Falcon 9 launch pads next to where NASA launches it rockets into space. SpaceX also has a Falcon 9 launch site in Vanderberg Space Force Base in California, up the coast from Santa Barbara.

Linking to dividend paying stocks, SpaceX is a new industry and everything it does is big, including spending billions of dollars. The idea is to use satellites in space to replace the Wi-Fi towers and maybe it will and maybe in will not. Dreams are possible, and if you like the dream you can invest in it. One should not have all your assets in SpaceX until it actually makes money, but as part of a diversified portfolio or buying an index fund you will be tied to the dream. The bulk of money should be profitable companies, because sometimes dreams come true and sometimes they tell great stories but little monetary return.

There are more questions than answers, till the next time – to raising questions.

The government has many levers at its disposal and sometimes it is does a great job and other times it is government tax dollars wasted. Sometimes political actions are essentially wasting government tax dollars, because the market has better and realistic ideas.

In an article by John Hanna and Sarah Raza of the Associated Press, the US is reopening a border crossing in Arizona to cattle from Mexico as part of a broader effort by the Trump administration to reduce record-high beef prices, through economists doubt the move will mean to grocery store shoppers. Over time, it hopes to reopen other crossings in New Mexico and Texas.

Beef prices clearly are a concern for the President Trump who announced he would allow up to 300,000 tons of imported ground beef into the US tariff-free, to be sold at below-market prices over the next 90 days. (midterm elections are in 90 days). In February, the White House said closing the border to livestock imports from Mexico more than a year ago was essential to containing the screwworm virus.

Derrell Peel, a professor of agribusiness at Oklahoma State University, Beef has been singled out because it is an expensive product and because it just high profile.

Previously, Mexico has traditionally provided 1.1 milllion head, or about 3% of the US cattle supply.

Mr. Peel said he does not expect any measurable impact on cattle prices or beef prices soon as 300,000 tons of beef is about 2% of domestic beef consumption according to the US Department of Agriculture data.

On January 1, the US cattle herd had dropped to 86.2 million head, the lowest figure in 75 years. Beef prices skyrocketed over the past 5 years, rising significantly faster than food food prices as a whole, according to the US Bureau of Labor Statistics.

Since July 2021 to July 2026, beef prices have risen 57%. Food prices are up 25%.

Glen Tonsor, a professor of agricultural economics at Kansas State University, believes the potential effect on beef prices from the smaller supply of cattle was lessened because the US beef industry is more efficient and has been able to get more meat from each animal than in past years.

Drought in cattle-producing regions on the US is a major reason the national herd is so small, according to David Anderson, professor of agricultural economics at Texas A&M University. If grass does not grow, cattle have nothing to graze upon forcing ranchers to sell them off. Low cattle prices over the past 2 decades are also a factor.

The shortage of cattle also has left beef processing plants operating below capacity. Tyson Foods closed a plant in Lexington, Nebraska. Tyson Foods also announced plans to close a plant near Salt Lake City, Utah and in Illinois.

JBS USA closed a plant in Memphis, Tennessee and lower the number of people at a plant outside Philadelphia, Pennsylvania.

Professor Peel believes it takes years to rebuild the US herd, which means prices will remain high for some time.

Linking to dividend paying stocks, in some industries the government is very helpful, for others for political reasons or potential outcomes the government is better to do less. Governments eventually pass and markets run the business cycles. Hopefully for your investments, the government is more of a help than hinderance.

There are more questions than answers, till the next time – to raising questions.

If you think about what you ate today or the past week, did it include instant noodles, chapatis or slice bread? For many it did because the raw ingredient is wheat and it is at the heart of modern diets.

In an article by Somini Sengupta of New York Times News Service, the breadbaskets of the world are getting pummeled by drone strikes, devilish weather, nudging prices higher amid soaring food costs.

Heat and drought have diminished harvests in some the biggest wheat-producing countries including the US, which is expected to have its worst harvest in half century, or prices will rise.

The Black Sea, a crucial path for the global wheat trade is an active theater of the Russia-Ukraine war. Both countries have traditionally been the breadbasket for Europe and Africa.

Beyond that, water drought has brought transit routes in the Panama Canal, the Rhine and Danube Rivers to be the lowest in years.

Relatively few countries dominate the export of wheat – Russia, Canada, US, Ukraine and the European Union. The customers are mainly low-income countries that no longer can grow much of the food they eat.

Evan Fraser, a professor who studies the global food system at the University of Guelph said the system we have in place depends on 3 things: seamless trade, cheap energy and a stable climate. Today none of these assumptions are true.

The good news is last year there was a bumper crop so global wheat stocks remain strong; the bad news is the price of bread and wheat prices are at a 3 year high.

Russia and Ukraine account for 1/3 of the wheat the world buys, however grain shipments have nearly ground to a halt because each side is attacking grain export terminals.

Wild fires spared the wheat belt of France, the EU’s largest exporter but high temperatures did not. Drought and heat are expected to lower the grain yields from 310 million tons in 2025 to 286.6 million tons in 2026.

Australia planted fewer acres of wheat because of high fertilizer costs, stemming from the closing of the Strait of Hormuz.

The US is about to have its worst wheat harvest since 1970, because of drought. The US Department of Agriculture estimated fewer acres were planted and yields are down.

Egypt buys most of its wheat comes from Russia and Ukraine but has tried to encourage more production in Egypt, however there is not enough water to meet the country’s needs.

President Trump imposed tariffs. To avoid higher tariffs, some countries bought more wheat from the US. Unfortunately, it is at higher prices than what other countries are offering. Countries such as Bangladesh say it is unfair.

The biggest effects of food insecurity are expected to be in Central America and southern African countries.

Linking to dividend paying stocks, agriculture companies are keys to the economy and those of us who live in the city depend on those companies and the system that feeds people. We also depend on the government to keep the systems in place which allows us to benefit from the system. President Trump has decided that an isolated policy and tariffs are the way to go, but it seems the consequences will last for a number of years. The consequences will affect companies such as John Deere. Higher prices are good for companies, but politically they are not good for consumers, who will win out?

There are more questions than answers, till the next time – to raising questions.

Prior to the subprime housing crisis in 2008, the conventional wisdom was to build wealth, you need to buy a house in a good neighborhood and pay off the mortgage. The house besides being a good place to live will increase in value and you will have the option to sell it and end up with building wealth for you and your family. The conventional wisdom applied to a great number of people because before the 2008 crisis, very few mortgage bonds failed which meant people paid off their mortgages and house prices increased. In 2008, the values of house fell, people were left with mortgages greater than the value of the home and many walked away. Financially it was the correct decision, but it caused a lot of pain for families.

Since that time, house prices in general have increased, but income did not keep up and people started to fall behind in having the ability to save for the downpayment. As housing prices increased the dream has gotten further behind. When the mortgage crisis happened, the banks tightened the ability to make a loan, which compounded the problem to buy a house. Then hedge funds began to buy blocks of houses, to hold till the cycle allowed for prices to increase. There are many factors are play and it seemed housing prices were getting further away from the next generations.

In an article by Sophia June of the New York Times News Service, Gen Z is turning to a different way to build wealth. Invest in the stock market, every year it is easier to do this. It is one of the reasons why many generations did not start. Prior to non fixed rate commissions, it was difficult to invest for the small investor – it was difficult to open an account, hold your securities, pay commissions on trading, because the market was orientated to the wealthy.

Nowdays, it is easy to open an account, pay 0 for commissions, buy index funds or whatever stock you wish to buy including buying fractional shares. The reality is if you invest consistently and try to buy more quality companies than bad ones, overtime the value of your portfolio will increase. One of the reasons why index funds work overtime is they are rebalanced every 6 months or the underperformers are changed for the ones that performing better. If you own individual stocks, selling underperformers is harder than you expect. To sell underperformers you have to say you made a mistake and the company is not coming back for a long time. You bought it for a reason or reasons, why are those reasons not good any more? Index funds just do it, because they are mandated to.

Roberta Katz, a Stanford University scholar who has done extensive research on Gen Z including writing the book Gen Z, Explained The Art of Living in a Digital Age said the Gen Z is a generation marked by uncertainty and malleability.

For boomers, there was a sense that you have your home, that you build your wealth, that you could build an estate. For Gen Z, they did not have a sense of that. One of the things our study found was a very high value on flexibility because there was a belief that the world they were going to know was a world of change.

A Gallup study in August found that 81% of Gen Z adults seek personal finance guidance with 75% finding information online.

One of the people in the article uses the Charles Schwab app to invest index funds and monitors his progress using the net-worth tracker in an app called My Wallet, which shows a graph charting the growth of his wealth.

Linking to dividend paying stocks, in our instant society, the reality is for most people building wealth takes time and the sooner you start the sooner the compounding effect can take place. Investing regularly, reinvesting your dividends and ensuring the companies you invest in make profits allows wealth to build. Once you reach a magic number, you really see the benefits and then what you do with your wealth allows you to have many more options.

There are more questions than answers, till the next time – to raising questions.

In the fashion industry, every once in a while, a chain comes and it seems all the teenagers or young adults are buying something from that chain. If the company is public, then the valuation only goes up. At some point the company will mature, growth flattens and everyone asks what happened?

In an article by Sui-Lee Wee of the New York Times News Agencies, the hot company was the most talked about company in retail. After millions watched the Grammies or Academy Awards and whatever the women were wearing was in stores by Wednesday. Shein was that company that could spot what Generation Z wanted and they could buy it within days. Shein overtook Zara and H&M, however something has changed.

No Chinese company has been successful as Shein as going global. And yet the company remains unusually reclusive.

Shein has taken pains to distance itself from its Chinese origins. In 2019, it established its headquarters in Singapore and deregistered its original Chinese corporate a few years later. The aim was to navigate Chinese rules governing companies seeking offshore listings and clear a path toward an IPO in New York.

The strategy failed. In the US, Shein encountered intense bipartisan scrutiny from lawmakers over its supply chain and labor practices. After abandoning its New York listing effort to 2024, it turned to London, where it faced similar resistance from non-governmental orgainzations and protesters.

This left Hong Kong.

Shein first act was remarkable. Their secret was a system built to compress the traditional fashion cycle. Shein used algorithms to track emerging trends, then place initial orders for a few hundred units to test demand. The model allowed it to introduce 4,700 apparel styles a day, Zara by comparison, produces 20,000 a year.

Shein paired that technology with an industrial ecosystem in Guangdong where spinners, weavers, seamstresses and small factories could rapidly manufacturer orders as small as 100 pieces. Shien has tried to model the system in Turkey and Vietnam but has struggled. In addition, competition such as Temu arrrived with even broader product assortments and even lower prices.

What is the future? investors such as Juozas Kaziukenas, an independent e-commerce expert do not see a clear picture. Outside of the fact that early investors want to cash out, what is the next phase.

Shein has tried some other tactics such as making its system available for brands, but 20 brands have signed on, however that is only 1% of the total net revenue in 2025, after starting it in 2023.

Shien is branching out to non-apparel items which accounted for 1/3 of its revenue – furniture, cosmetics, pet products and electronics.

Linking to dividend paying stocks, one of the reasons why you are biased towards them is they have demonstrated long term ability to make profits. Businesses often sees fast risers, but sustainability is a different equation because companies often start off seeing a better way or less expensive way or to reduce the margin of larger companies. There is always another company looking to do it less expensive, it is harder to be in a market where margins can rise or be stable. There is a reason why to like companies that can pay dividends for years – they have adaptability.

There are more questions than answers, till the next time – to raising questions.

One of the reasons to invest is to build up assets, and enjoy the wealth the assets to pay for whatever lifestyle you want to live. Eventually everyone passes away and everyone leaves an estate. Some estates are not enough to change your lifestyle, some estates will change your lifestyle whether you want it or not and some estates automatically change your lifestyle. In the movie My Fair Lady, the father of Eliza Doolittle inherits money and his lifestyle changes from being a dustman – by its nature a dirty job, but one he enjoys to wearing a suit and tie, needing to marry and manage his finances respectability.

The England the wealthy tend to have titles such as Lord and Honorable, and it is relatively easy to become a Lord if you have money. Buy into it, and have the King appoint you a Lord of some plot of land. The wealthy in England tend to have large estates and homes, which makes it easier to tell who is really wealthy and who is not.

In a book written by Laura Thompson called Heiresses – The Lives of Million Dollar Babies, published by St. Martin’s Press, NY, 2021, she writes about the woman who inherited wealth, what kinds of lives did they live?

There is always a cross section – some were involved in the party scene which lavish parties – originally they had champagne and alcohol but gradually move to hard drugs; some funded charitable events; some influence world affairs, some married for a wide variety of reasons. They were similar to what most people do, but on a higher monetary scale.

For generations, it was the oldest male heir which were inherited and this was written into the law of the land. It has only been the last hundred years or so where change took place. Many of the women who inherited needed a husband to be respectable in society. In our society, we often read about billionaires, there are many people who want to marry a billionaire and there are dating sites for them. The billionaire often has to ask – is the person interested in me or my money? It is the same for the women in the book – is the person interested in me or my money? and if my money what would they do with it?

Linking to dividend paying stocks, as you ensure your estate will be large for your heirs, sometimes this will be the best thing in the world you can do and sometimes they might wonder if they had a little less money, but not much less money. Whoever you leave the money to, their values will show, it the meantime it is better to have money than not to have it as it changes the stress level of life.

There are more questions than answers, till the next time – to raising questions.

In every industry there is a market leader, some have near monopoly positions, but there is market leader in setting of prices, revenue, profits and we all generally look at that company to see how well they are doing. If they are doing well, then we can say that industry they cater to is doing good. If they are struggling then you look to the competitors to see how they are doing and make a decision on how that segment is doing.

In the retailing world, Walmart is the clear leader and since 2/3s of the economy of the US is related to retailing, Walmart’s results give a clear indication of how the economy is doing.

In an article by Anne D’innocenzio of the New York Times News Service, Walmart posted the slowest sales growth in 6 years as consumers in the US tightened their wallets.

Comparable sales at Walmart store rose 2.6%, the slowest growth in 6 years. The company’s stock fell on the news. The company had been doing very good because cost-conscious shoppers were flocking into the stores.

America’s biggest retailers said that consumers had been wary with their spending and keen to get value from every dollar spent, even if household balance sheets seemed healthy.

In the US, the Treasury Department has sent tariff refunds back to the importers. Walmart received $2.9 billion. Originally, Walmart was going to use most of it to improve stores or internally, now Walmart has lowered the prices of 11,000 items with the intent of making those reductions permanent when possible. John Furner, the CEO said we are investing in price because customers need us to.

Linking to dividend paying stocks, as a dividend investor you like big companies and generally you can make a good income buying them. They are big for a reason, they keep costs down, margins up and are profitable. However all companies have to deal with the economic cycle and where we are in it.

There are more questions than answers, till the next time – to raising questions.