This is what Congress and Powell at the Federal Reserve created through hyper-spending and money printing, driving down real interest rates to unprecedented levels. (Inflation would be even higher, with real interest rates even lower, had the calculation basis remained the same as in the 1970s.)
The Buffet Indicator Plot
Real Interest Rate Plot
The Inflation-Adjusted S&P 500 Index
Historic plot of debt/GDP
Have a look at these and put together what you think it means. Notice that the Buffet Plot (of Market Cap to GDP) and Real Interest Rate Plots are somewhat inverted. Notice the cyclic nature of the S&P, and where we fit in now compared to similar points in history. Notice debt/GDP, but at a time when we have a retiring baby-boomer generation, an influx of recent retirees (thinking they have wealth), and workers with less interest in being productive. In short, this is nothing like the immediate aftermath of WW2.
How would you extrapolate each of these charts? What would happen if the great powers create WW3?
Who will pay in the USA to change our course? Consumers? Retirees? Government workers? Investors? The Poor/Middle Classes? The one-percent?
I am thinking that this is an awful time to be in your 50s or 60s. Many in this group were victims of out-sourcing. Most are unlikely to get hired for a good job and many do not have enough saved to weather the storm.
More young immigrants? Well, how do they add enough value during the age of automation? I see most of the current "migrants" as a poor fit for what this country needs to get out of its debacle. For sure we have no room to increase entitlements, federal bureaucracies, or foreign funding of wars and other needs.
The Buffet Indicator Plot
Real Interest Rate Plot
The Inflation-Adjusted S&P 500 Index
Historic plot of debt/GDP
Have a look at these and put together what you think it means. Notice that the Buffet Plot (of Market Cap to GDP) and Real Interest Rate Plots are somewhat inverted. Notice the cyclic nature of the S&P, and where we fit in now compared to similar points in history. Notice debt/GDP, but at a time when we have a retiring baby-boomer generation, an influx of recent retirees (thinking they have wealth), and workers with less interest in being productive. In short, this is nothing like the immediate aftermath of WW2.
How would you extrapolate each of these charts? What would happen if the great powers create WW3?
Who will pay in the USA to change our course? Consumers? Retirees? Government workers? Investors? The Poor/Middle Classes? The one-percent?
I am thinking that this is an awful time to be in your 50s or 60s. Many in this group were victims of out-sourcing. Most are unlikely to get hired for a good job and many do not have enough saved to weather the storm.
More young immigrants? Well, how do they add enough value during the age of automation? I see most of the current "migrants" as a poor fit for what this country needs to get out of its debacle. For sure we have no room to increase entitlements, federal bureaucracies, or foreign funding of wars and other needs.
Last edited:
