And how robust is the US economic model really?



Posted by Ed 8 mths ago
“I find the cognitive dissonance and normalcy bias regarding what has actually happened over the last ten years to be at astounding levels. As someone who views the world based upon a factual assessment of financial, economic and global data, I’m flabbergasted at the willful ignorance of the populace and the ease with which the ruling class has used their propaganda machine to convince people our current situation is normal, improving, and eternally sustainable…

“With stagnant real wages since the Wall Street created financial crisis, a critical thinking person might wonder how an economy whose GDP is 70% dependent on consumer spending could grow for the last nine years, with corporate profits at all-time highs, consumer confidence at record highs, and the stock market at record highs…

“You would think after being burned with 50% losses twice in the space of eight years, the average American would have learned their lesson. Debt kills. Consumer debt, which collapsed under an avalanche of Wall Street write-offs (paid for by you the taxpayer) in 2009/2010, has regained all-time high levels and is accelerating as we enter this final phase of blow-off top euphoria. When the next inevitable financial collapse occurs these heavily indebted suckers will be blind-sided with a baseball bat to the skull again. It seems Americans never learn.”


Ed 7 mths ago
Ray Dalio: "We're In The 7th Inning Of The Economic Cycle"

Before moving on to Dalio's next point, it's probably worth revisiting the Bridgewater Founder's now-famous "1937" thesis (where he posited that the US market was nearing a "1937"-style top that would soon give way to another retrenchment). Dalio first introduced the concept three years ago, then modified it following President Trump's upset victory in the presidential election:

Debt Limits Reached at Bubble Top, Causing the Economy and Markets to Peak (1929 & 2007)
Interest Rates Hit Zero amid Depression (1932 & 2008)

Money Printing Starts, Kicking off a Beautiful Deleveraging (1933 & 2009)

The Stock Market and "Risky Assets" Rally (1933-1936 & 2009-2017)

The Economy Improves during a Cyclical Recovery (1933-1936 & 2009-2017)

The Central Bank Tightens a Bit, Resulting in a Self-Reinforcing Downturn (1937)

Today, Dalio argues, the cycle hasn't arrived at its climax just yet - rather, we're closer to the seventh inning. Because while debt levels have surpassed their levels from before the crisis, companies aren't yet being choked by their debt payments (well, at least not in the US).


Ed 7 mths ago
Followed by WW2 of course....

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