The real economy (Inflation adjusted) has barely grown by $1 trillion in almost 4 years.
Let's take a moment and go back in time and read what the Congressional Budget Office was forecasting in 2019.
"At $16.8 trillion, debt held by the public at the end of 2019 was equal to 79 percent of gross domestic product (GDP),
far greater than the average debt for the past 50 years. CBO projects that if current laws generally remained unchanged,
that debt would increase to $31.4 trillion, or 98 percent of GDP, by 2030. Such high and rising debt could significantly
affect the U.S. economy and the federal budget."
We ended 2019 $22,719T, 107% of GDP. We have since added $10 Trillion of public debt and barely got $0.10 on the dollar
of economic growth in almost 4 years.
With Max Employment
With the lowest unemployment rate since 1969 (3.4%)
With record low-interest rates for most of that time
With QE
Any wonder why we have an inflation problem?
During the same time period, corporate profits rose +43%. What's wrong with that picture?
Folks if we cannot grow the real economy at a healthy pace now, under the best employment
conditions and corporate profits require $10 trillion of added public debt every 4 years. Then
we are in deep trouble. Moreover, if you are buying up stock thinking EPS will grow. Then you
are in even deeper trouble.
What will happen when (NOT IF) we go into a recession?
Minsky famously argued that “stability is destabilizing”
Just my 2 cents. Food For Thought.
Let's take a moment and go back in time and read what the Congressional Budget Office was forecasting in 2019.
"At $16.8 trillion, debt held by the public at the end of 2019 was equal to 79 percent of gross domestic product (GDP),
far greater than the average debt for the past 50 years. CBO projects that if current laws generally remained unchanged,
that debt would increase to $31.4 trillion, or 98 percent of GDP, by 2030. Such high and rising debt could significantly
affect the U.S. economy and the federal budget."
We ended 2019 $22,719T, 107% of GDP. We have since added $10 Trillion of public debt and barely got $0.10 on the dollar
of economic growth in almost 4 years.
With Max Employment
With the lowest unemployment rate since 1969 (3.4%)
With record low-interest rates for most of that time
With QE
Any wonder why we have an inflation problem?
During the same time period, corporate profits rose +43%. What's wrong with that picture?
Folks if we cannot grow the real economy at a healthy pace now, under the best employment
conditions and corporate profits require $10 trillion of added public debt every 4 years. Then
we are in deep trouble. Moreover, if you are buying up stock thinking EPS will grow. Then you
are in even deeper trouble.
What will happen when (NOT IF) we go into a recession?
Minsky famously argued that “stability is destabilizing”
Just my 2 cents. Food For Thought.
Comment:
While everyone was once again euphoric a month ago, I warned the real economy is in trouble. A month later everyone now agrees with me. Not just some.
Comment:
After massive amounts of deficits that caused FITCH to downgrade US rating from AAA to AA+ (rightfully so) The overall economy remains in trouble as Real (inflation-adjusted) GDP has only risen $1 trillion. While US public debt since 2019 has gone from $19 trillion to $33 trillion. ($1.8 trillion since the debt ceiling was lifted a few weeks ago. Take a moment and let that sink in.
I have been warning about this pending disaster in the making for a long while now in multiple ways on tradingview.
Bad JUJU!
I have been warning about this pending disaster in the making for a long while now in multiple ways on tradingview.
Bad JUJU!
Real Macro Economic Investing
www.patreon.com/Realmacro
www.patreon.com/Realmacro