Headlines: Costs climb, Infrastructure Week, Climate Change and Cow Belching
This week’s newsletter and blog headlines:
- Costs continue to climb-for how long?
- Infrastructure week? Infrastructure 10 years
- Climate change and cow belching
- Covid deaths, blue vs red counties
- Recognizing and remembering our Veterans on Veterans Day 11/11/2021
- Additional Resources: Retirement Plan and IRA Required Minimum Distributions FAQs
Costs continue to climb-for how long?
At the beginning of the Pandemic, I suggested several trends would occur. One was increased investment in our healthcare system to accommodate periodic surges of demand based on the recognition of shortages during Covid-19. Another was an increased onshoring of manufacturing.
With the increase in inflation incurred over the past 6 months, the question is how transitory is this? Turns out that onshoring of manufacturing is increasing and accelerating and one unintended consequence of Covid has been the impact on the supply chain. Goods delivery has been significantly delayed and shortages are palpable in price increases. What will ameliorate these changes? Turns out, because of the increase in shipping costs, onshoring is making more sense. Will it be more expensive, and how much more expensive? The increase in shipping and supplying is moderating the delta between onshoring and offshoring. Also increasing productivity because technology should play a major role in reducing the delta between offshoring and onshoring. The use of robots in a manufacturing export center like Germany is increasing quickly. Increased productivity was also a result of the great recession which is one reason a hiring rebound and GDP growth underperformed.
Infrastructure week? Infrastructure 10 years!
$1.5T is included in the infrastructure bill that passed the House this past weekend. Turns out about $550M was already agreed upon and consisted of renewals of spending agreements focused on infrastructure. The rest of the bill is new money to be spent over 10 years. Still pending additional spending of close to $2T yet to be negotiated and passed with much more difficulty. Today the stock market liked the bill with infrastructure stocks gaining.
Some climate change provisions are included in the bipartisan infrastructure bill, but a more substantial investment is contained in the proposed Build Back Better bill.
Climate change and cow belching
From the SF Chronicle this week:
- The Embarcadero will need to be elevated by 7 feet to protect the piers and road from rising seas from the result of climate change.
- Reducing methane in cow belching by introducing a specific red seaweed into their feed. It reduces their methane production by more than 50%. Cow belching is one of the higher contributors to global warming.
Covid deaths, blue vs red counties.
Recent evidence is emerging of significant differences in hospitalizations and deaths emerging in red counties vs blue counties. In 2020 there was no difference. That was before the vaccine. The uptake of vaccines in blue counties is much more significant than in red counties. Here is a link to the included NYTimes article addressing this occurrence. Link: https://www.nytimes.com/2021/11/08/briefing/covid-death-toll-red-america.html
Recognizing and remembering our Veterans on Veterans Day 11/11/2021
The SAS Team appreciates and recognizes those who serve today and did so in the past. Today, and always, we will remember the sacrifices, the service with honor, the dedication of those who serve, and those who love and support them. And especially today on Veterans Day, we take the extra time to extend our thanks to those who have or are serving their country.
Additional Resources: Retirement Plan and IRA Required Minimum Distributions FAQs
For 2021, Required Minimum Distributions, or RMDs, will be required from all eligible accounts before 12/31/2021. Last year, 2020, the CARES Act provided a one-year suspension on Required Minimum Distributions. That suspension ended on 12/31/2020.
To determine if you may be required to make a Required Minimum Distribution in 2021, consider the following two questions:
- Yes/No: Are you age 72? OR were you age 70.5 years old as of 1/1/2020? OR Regardless of age, do you own an inherited or beneficiary retirement account of any kind?
- Yes/No: Do you own any of the following employer-sponsored retirement plans? Profit-sharing plans, 401(k) plans (including Roth 401(k) plans), 403(b) plans, and 457(b) plans. Do you own any traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs? (Note: RMD Rules do not apply to Roth IRAs while the owner is alive).
If you answered "Yes" to both of the above questions, you may be required to make a distribution from each eligible account before 12/31/2021.
For SAS managed accounts eligible for a 2021 RMD, please contact the SAS Advisor Team with the following information before 10/31/2021:
- If you would like your RMD to be completed with the same instructions as 2019
- The percentage to be withheld for federal *and* state taxes, or mark none
- The account to receive the RMD funds into either another owned Individual, Joint, or Trust account managed by SAS, or an external linked account not managed by SAS
- If banking instructions are not on file, please complete, sign and send back the following form to the SAS Advisor Team along with your responses: https://veoone.tdainstitutional.com/teamsite_vdh/resources/documents/downloadforms/TDAI9341.pdf
For non-SAS managed accounts eligible for a 2021 RMD, contact that account's advisor, custodian, or plan administration to complete the 2021 RMD before 12/31/2021.
IRS RMD Reference Link per the date of this blog 10/15/2021: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions
This website is informational only and does not constitute investment advice or a solicitation. Investments and investment strategies recommended in this blog may not be suitable for all investors. SAS Financial Advisors, LLC and its members may hold positions in the securities mentioned within this newsletter.