5 big issues that could hit your pocketbook and portfolio in 2024

We’re barely two weeks into the new year, and already a flurry of activity — from new state and federal regulations to heightened tensions around the globe — stands to impact the economy and your finances, both in the short and long term.

Here are some things to watch as we move through this year from today’s first-quarter vantage point.

Big rules with bigger implications

There have been several rules put into effect or announced for 2024, and your voice and advocacy will be needed to overturn them and the harm they will cause. First, the Department of Labor imposed a rule that threatens to eliminate tens of millions of gig worker and independent contractor positions and could upend small businesses and the entire economy. This is based on the horrible AB 5 law from California, the incubator of all bad ideas.

Next is the Corporate Transparency Act’s “Beneficial Ownership Information” rule, which is a mass data collection program targeting small businesses.

Additionally, the Securities and Exchange Commission is considering whether to approve natural asset companies for listing on the New York Stock Exchange, which threatens all of our natural resources.

Your advocacy is needed to resist and repeal all of the above.

Also, the SEC finally approved a number of spot Bitcoin exchange-traded funds, which will undoubtedly shift the cryptocurrency landscape but also may bring central bank digital currency issues back into the spotlight.

The consumer and the economy’s hard or soft landing

On the back of bonds, banks, and debt downgrades causing trouble last year, much terrain is left to navigate — and all of the aforementioned issues are still in play.

We have seen growth on paper in the GDP, at the expense of consumer balance sheets and with big government deficits, but there would need to be a real shift in productivity to expect that level of growth to continue this year.

Will government spending help keep the GDP in positive territory, or will we see a recession (expected to be mild if it happens) in 2024? As with last year, we may find that the economy is quite different looking at it in pieces, depending on factors such as industry and consumer wealth levels.

And the threat of inflation remains very real.

Regardless, the Fed will have its work cut out for it, as large government fiscal deficits remain an issue for Treasury market supply and demand. The Fed may have to intervene to avoid chaos.

The election

We are already seeing all kinds of shenanigans, including several states trying to keep former President Trump off the ballot, lots of infighting among the GOP ranks, talk over whether Joe Biden will make it to the November election, and a Congress that, despite a leadership change, doesn’t seem intent on making material fiscal progress before the election.

Elections often bring with them market volatility, so be prepared for that.

Also, don’t be surprised if we see a change in tone or policy in key areas, such as a shift in Federal Reserve policy to support the stock market before any election. The Fed will insist it isn’t acting politically, but you be the judge of that.

The BRICS and G7

On the global economic front, the BRICS countries — Brazil, Russia, India, China, South Africa — and other nations will continue to look at trade in their own currencies (potentially with a gold option for settlement, as has been the case with China lately).

One item that might accelerate this is the push from various well-connected people, including former treasury secretary and Obama adviser Larry Summers, for the G7 to explore if it can “legally” seize $300 billion in frozen Russian assets and use that money to fund the war effort in Ukraine. Yes, this is as insane as it sounds, and we know the freezing of Russia’s assets led to all kinds of repercussions for the United States, as well as an acceleration in de-dollarization and non-dollar trade exploration. G7 leaders will discuss the move at their meeting in February, per recent reports.

The peace dividend

The “peace dividend” is an economic boost derived from a stable geopolitical environment. Some folks view it concretely (a reduction in defense spending, no economic destruction, and the like from not being at war). Others view it in terms of sentiment. Less geopolitical volatility creates more certainty, and that sentiment moves markets in a positive direction.

In either case, the peace dividend, if it hasn’t fully ended, “is clearly at the end of the road,” as billionaire founder and CEO of Citadel Ken Griffin said recently.

Russia’s invasion of Ukraine began in February 2022. The fighting — and the massive payments from U.S. taxpayers to keep Ukraine on the battlefield — continued last year. Violence and turmoil accelerated with the terrorist massacre in Israel by Hamas (backed by Iran) that led to an official war declaration by Israel. This has renewed tensions not only in the Middle East but also throughout the United States and Europe, as terrorist sympathizers have been emboldened to foster chaos across major global cities.

With the United States projecting weakness and a lack of leadership (remember, the Biden administration loosened sanctions on Iran and gave it access to frozen money to the tune of tens of billions of dollars, not to mention America’s overall weakened financial position), there are heightened concerns over the possibility for conflicts in other areas as well. China may see an opportunity to seize Taiwan, for example. And North Korean dictator Kim Jong Un said recently he has “no intention of avoiding war” with South Korea.

Of course, we expect other issues to come about and some old ones to rear their ugly heads, so buckle up and ensure you are fully funded in a personal emergency fund (at least 12 months of living expenses) and have considered portfolio hedges. Use your voice and take action where possible because it’s a critical time for our country and your prosperity.