Regardless of the effects of inflation, interest rate hikes, and the volatility in public markets, the market for private companies is still strong – for the moment.

State of U.S. Federal Finances

For the first time in history, the national debt exceeds the gross domestic product (“GDP”). This didn’t even occur in 2008 to 2009 during the “Second Great Depression”. National debt is $31.7 trillion while Gross Domestic Product is $25 trillion – national debt is 127% of GDP. Furthermore, US Treasury Revenue is about $4.9 trillion AND we’re spending just about $6.27 trillion with an increasing deficit. US Federal Revenue is only 15% of our national debt. National debt will never get reduced, much less paid back at this rate. Debt service alone on the $31.7 trillion would also seem to indicate that we will never have a balanced US Federal Budget again – ever. We are simply spending ourselves into a market correction.  These numbers are alarming and owners are strongly advised to get ahead of any pending market correction.

Inflation and Interest Rates

Inflation is here and perhaps worse than thought. The Fed raised the Federal Funds Rate 7 times in 2022 and twice in 2023 so far. Fed officials have indicated the rate may be as high as 5.1% to 6% by the end of 2023. This would be the highest the Federal Funds Rate has been since October 2007. 

Typically, interest rate increases have a downward effect on the value of private companies … but – we have not seen this occur- yet. Get ahead of this. If you miss the mid 2023 market, be prepared to wait 5 to 7 years for the next market cycle … and if you wait, and Capital Gains Taxes go up, you will net less when you eventually sell.