In 1982 as this chart bottomed out, it set up the GREAT AMERICAN BULL MARKET. not necessarily a TIMING TOOL, BUT IT DOES SHOW A STARK CONTRAST to what we now see......total GOV debt in NO MAN'S land, in nose bleed section....no doubt NEAR "the point on no return".
Above chart provided by contraryinvestor.com and posted on jessee's cafe
The straight up trejectory from 2009 was from combatting the financial crisis andhas put us in harms way of a debt implosion, normal is not where we are.
GOV debt must be paid back....but how can we? Defaulting would mean losing the reserve currency status, printing $'s has fueled the so-called recovery.....but they cannot always control where it goes, and their OWN policy and that of the HEROES FED leads banks NOT to lend.
NOW....on top of what you are looking at above, we are set to UNLEASH a TSUNAMI of debt issuance.......there will come a time where the current rates offered will not be acceptable.
ANY rise in rates will make it even harder to ever pay back the debt, and servicing it near impossible.
I recently read that home sales had slowed because "mortgage rates had risen"....my goodness they are still near generational LOWS....a few ticks take people out of affodability range?
I had also shown last week how each new $ of debt issued generates less and less GDP bang for the buck.....so if you wonder why $TRILIONS have not had PROFOUND effect on economic advancement....that is why.
Internet spoils profit margins for all kinds of businesses, and ran Blockbuster out of business or near brink of, and that means TONS of Commercial locations shut down, costing JOBS, and RENTS. When retailers try to close a sale, they are more and more confronted with the faceless internet shop that will sell for peanuts and ship for free.
Our manufacturing base, also because of direct and indirect gov trade policies, is all but whithered away, those jobs perhaps gone forever. SO WHERE do the future good jobs come from?
How does a $30B jobs bill work in a $14 TRILLION economy? DOES DIRECTLY influencing direction of stock prices create sustainable recovery? FREE MARKETS were not allowed to carry out the natural selection process.
We the people feared NOT the DEATH of the unholy BIG BANKS, we fear their existance and what control and influence they peddle to the government....and MANY of their fledglings are in positions of power and influence.
You cannot borrow and spend your way to prosperity, you can only influence short term trends, and the larger degree trend, the SECULAR BEAR MKT will then resume at some point and has the potential to drive the markets MUCH lower than where they rise to....IMHO
Health Care debate aside, the point I am making is when the MAJORITY of THE PEOPLE speak out as to what they want, and then the government decides what is best for us the MAJORITY and that goes AGAINST our wishes......has the Constitution been soiled?
Now we're on course for an even BIGGER UNSUSTAINABLE government.....and ask yourself how well and efficiently they usually run things?
The reversal day we had Thursday shows we hit a price that attracted sellers, Tops don't usually end with a thud, but corrections can occur at anytime.
Duratek
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