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Yesterday, the first-quarter real Gross Domestic Product (GDP) growth rate came in at an anemic 0.2%, confirming my view that the economy has slowed to a crawl.

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Will a Weak Economy Derail the Bull Market?

Yesterday, the first-quarter real Gross Domestic Product (GDP) growth rate came in at an anemic 0.2%, confirming my view that the economy has slowed to a crawl.

‚??The stock market and the economy are two different things.‚?Ě
—¬†Milton Friedman

The Nasdaq last week finally hit an all-time high, surpassing the 5,000 level achieved 15 years ago in March 2000. It took much longer for the Nasdaq to hit record highs than the Dow or the S&P 500 due to the dot-com frenzy in 2000 that sent the technology-heavy Nasdaq soaring.

The Nasdaq record set off another round of predictions by the doomsayers of another ‚??imminent crash.‚?Ě In the past few months, we‚??ve seen dire forecasts, including one from Congressman Ron Paul. Many of the warnings are aimed at seniors who are vulnerable to irresponsible scare tactics.

The Nasdaq has nearly quadrupled in six years —¬†at a time when the Cassandras were warning of another collapse. How wrong they were!

There‚??s a big difference between the Nasdaq of 2000 and today. Back then, the high-tech stock index was selling at 175 times earnings. Today, it is¬†selling for 30 times earnings.

Are stocks too expensive? They are certainly fully priced, and today‚??s market is vulnerable. We haven‚??t had a serious correction in years.

Yesterday, the first-quarter real Gross Domestic Product (GDP) growth rate came in at an anemic 0.2%, confirming my view that the economy has slowed to a crawl.

Last week, the quarterly Gross Output (GO) and B2B (business-to-business spending) data that I have been championing were released by the federal government. Real GO, which measures spending at all stages of production, rose only 2.6% on an annualized basis, and B2B climbed only 2.5%, much slower than past quarters.

It is not enough to cause a recession, but it‚??s enough to worry Fed Chair Janet Yellen and her colleagues at the U.S. central bank to extend its easy-money policies. In short, the Fed won‚??t raise rates any time soon and, in fact, will engage in printing more money.

Last weekend, I talked to Robert Kuttner, former chief economist at BusinessWeek, who told me that the Fed‚??s low interest rate policy has been good for the economy on net balance. He will be the defending attorney when we put ‚??The Fed on Trial‚?Ě at FreedomFest on July 10 (see our newly designed website: www.FreedomFest.com).

Certainly, low rates have been good for the stock market and our portfolio. And I think that trend will continue, especially for dividend-paying stocks in Forecasts & Strategies. It is the golden age of income investment.

Remember, the stock market is always looking forward. With a weak economy, the Fed is unlikely to raise rates any time soon and will continue to pump new money into the system. Much of that new money is likely to go into the stock market.

You Blew It! Hawaii Raises Smoking Age to 21

‚??The triumph of persuasion over force is a sign of a civilized society.‚?Ě
— Mark and Jo Ann Skousen, ‚??Persuasion vs. Force‚?Ě pamphlet

The governor and the legislature of the state of Hawaii could learn a thing or two from the views my wife Jo Ann and I shared in our pamphlet, ‚??Persuasion vs Force.‚?Ě Read it here.

Last week, Hawaii became the first state to raise the smoking age to 21. Let‚??s see, now, you can vote and go to war for your country but you can‚??t pick up a cigarette? What‚??s going wrong in this country when we cannot trust young adults to choose for themselves whether to smoke or not?

The law would prevent adolescents from smoking, buying or possessing both traditional and electronic cigarettes. Those caught breaking the rules would be fined $10 for the first offense. Subsequent offenses would lead to a $50 fine or mandatory community service.

‚??It’s definitely groundbreaking legislation,‚?Ě said Jessica Yamauchi, executive director of the Coalition for a Tobacco Free Hawaii, which pushed for the bill. ‚??It’s amazing to be the first state in something. That’s very exciting for us.‚?Ě

Some local governments have similar bans, including Hawaii County and New York City (not surprising).

According to the state‚??s Department of Health, 5,600 kids in Hawaii try smoking each year, and 90 percent of daily smokers begin the habit before age 19. Meanwhile, 1,200 people die from tobacco use or exposure in Hawaii every year.

Opponents say it’s unfair that a military veteran returning from service could be prevented from smoking.

‚??It is not right because you are deemed an adult when you turn 18,‚?Ě said Michelle Johnston, owner of Sub Ohm Vapes in Kailua-Kona.

‚??You can sign up and be in the military and basically give your life for your country. You can vote,‚?Ě she said. ‚??Why shouldn’t you be able to choose if you want to buy tobacco products or vaping products, when you’re considered a legal adult?‚?Ě

Good question.

Quote for the Day: I just received this note from Robert Mish, president and founder of Mish International Coins in California: “FreedomFest is one week where I forget about business and instead enjoy learning, thinking, and having fun… and bringing along as many first-timers as will listen. Total recruitment this year looks like 10-15.‚?Ě Thank you, Robert. What‚??s so exciting about this conference? (The big event, July 8-11, 2015, Planet Hollywood, Las Vegas, is only two months away.) Check out our new website: www.FreedomFest.com. Or call toll-free 1-855-850-3733.

This weekend, I fly with my son Todd to Omaha for the 50th anniversary shareholders meeting of Warren Buffett‚??s Berkshire Hathaway. I‚??ll have a full report on this historic meeting next week — and maybe even a tip or two.

In case you missed it, I encourage you to read my e-letter column from last week on Eagle Daily Investor about how to be successful on Wall Street. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

Upcoming Appearances

O Las Vegas Money Show, May 12-14, Caesars Palace: I will be the keynote speaker at this year‚??s Vegas Money Show! I will be speaking on ‚??Is the Golden Age of Investing Over? Not for this Market-Beating Strategy!‚?Ě Other speakers include Andy Busch, Marilyn Cohen, Roger Conrad, Bob Carlson, David T. Phillips, Jeff Hirsch, Mark Hulbert, Louis Navellier, Jim Stack and Wayne Allyn Root, as well as my Eagle Financial Publications colleagues Doug Fabian, Chris Versace and Bryan Perry.

Be a guest of Eagle Financial Publications and register for FREE by using priority code 038654 and calling 800-970-4355 (toll free in the United States and Canada) or signing up online.

O I want to invite you on a cruise, Sept. 13-20, with Newt Gingrich, Chris Versace and me, among others. I will be doing a special one-on-one interview with Newt Gingrich on the cruise. Come spend seven fabulous days aboard the six-star luxury liner, the Crystal Symphony. We will travel from New York to Montreal with a roster of noted historical scholars, political pundits and renowned market experts who will share their insights and perspectives on the current environment in Washington and Wall Street. For further information, including how to sign up, call 800-435-4534 or visit www.PoliticsAndYourPortfolio.com. Not to be missed! The deadline to sign up is May 22!

Written By

Mark Skousen is a college professor, prolific author and world-renowned speaker. He‚??s made his unique sense of market and investment trends known and respected in the financial world. With a Ph.D. in economics and a focus on the principles of free-market capitalism and ‚??Austrian‚?Ě economics, Mark Skousen has often gone contrary to the crowd in his investment choices and economic predictions ‚?? and has often been proved right.

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