McRocket
Gold Member
- Apr 4, 2018
- 5,031
- 707
Things are looking really, really good right now. We may even be seeing some unexpected life from overseas. A recession may not happen for quite a while.
Damn good.
Now, it's time to look at the exploding debt Trump allowed to get us here. This is a great sugar high, but that's the other half of this equation.
.
What?!? 'Really, really good'?
I realize that you say that you run investment accounts for people and thus have to convince them into thinking things are better then they are so they don't liquidate their portfolios and cost you tons of commission fees (and don't bother denying it - no one who truly knows investing would believe you).
But to call the present economy 'really, really good' is ridiculous.
The M2 Money Velocity is still at record lows (since the 1950's). That is TERRIBLE. That means money is not moving. and the money that is is largely from cheap debt creation. And that is NEVER good for an economy.
Velocity of M2 Money Stock
The DOW has been flat for over a year.
The fiscal deficit is out of control.
https://www.fiscal.treasury.gov/files/reports-statements/mts/mts.pdf
The POTUS is begging for even lower rates and is now talking about QE. Which is madness.
Bloomberg - Are you a robot?
How the fuck can things be 'really, really good' if Trump is asking for another round of QE?
GDP estimates are hovering under 2.5% - some, much lower. And if you know your stuff, you know that even those numbers are higher than they should be thanks to the modifications of how the GDP is measured that were put in place a few years ago.
GDPNow - Federal Reserve Bank of Atlanta
Nowcasting Report - FEDERAL RESERVE BANK of NEW YORK
The DOW is counting on a trade deal with China - which China would be idiots to do (given Trump's lousy poll numbers). I bet you a deal will be announced and upon closer inspection it will amount to almost nothing.
The employment-population ratio (a FAR better employment metric than the joke U-3) is still miles below what it was before the Great Recession.
Notice: Data not available: U.S. Bureau of Labor Statistics
The economy is stuck in one gear above stagnation...and is living on HUGE debt powered by the Fed (and fiscal deficits to an extent). That is NOT 'really, really good'.
You want to say something like '2-2.5% GDP growth looks the norm for the foreseeable future and the threat of a recession is fairly remote so long as the Fed is all in' - fine...I could buy that (though, when this debt house of cards finally falls - it could make the GR look like a picnic).
But to call the economy 'really, really good'? I clearly overestimated your macroeconomic knowledge.
So noted.
Good day.
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