Post by
Experienced on Jan 28, 2024 8:22am
Debt and Recessions/Depressions
The link below is old from 2011 but the message still holds and if anything the message/lesson is even more relevant than it was back then.
The recent experience in the US regarding the debt ceiling illustrates the problem. The US Government according to the CBO will continue to have multi trillion dollar annual budgetary deficits as far as the eye can see based on current approved Government programs. The Republicans in signing the last debt ceiling deal claimed credit for reducing the growth in the annual deficit but did not nothing to stop the annual deficits. Sooner or later the dam will break just as it has in the last thousands of years of history when things get far enough out of whack. The question is not "if" but "when".
One way of looking at this is to use the Shiller price earnings ratio as an indicator of where things stand. I have used this as one of my indicators for making asset allocation decisions for many years since it is a reliable indicator. Right now the actual market P/E ratio in the US as measured by the S&P 500 is about 50% higher than the average for the Shiller P/E ratio. This is not a good thing and at best a flashing amber light and at worse a red light that should be heeded.
So why is it so far out of whack and resisting moving back to where it should be?
There are many reasons for this - too many to discuss here. But to me a fundamental reason is the excessive annual deficit (stimulus spending) by Governments around the world which at some point will force the system to break down. History has shown that the longer it takes for this to happen the greater the following devastation (remember my falling elevator analogy).
Other reason is what Nukester (and others here) has been talking about - the unprecented and massive intervention by Governments into the business ecosystem. Whether or not this actually systematically orchestrated by the Davos crowd or not is a moot point. The point is that it is happening.
My question for Nukester is - Where would you move to in order to escape?
Comment by
meritmat on Jan 29, 2024 12:43am
Mexico Great beer, great fishing and loose women (for you young single guys)
Comment by
Experienced on Jan 29, 2024 8:59am
Nukester... Didn't know you are an American - thanks for the info Just want you to know that smart and thoughtful people such as yourself are always welcome to immigrate to Canada.
Comment by
nukester on Jan 30, 2024 11:37pm
Experienced, You forgot to put the smiley face after the joke :-) Cheers, Nukester
Comment by
liljohnnyjoke on Jan 31, 2024 9:56am
it would have been debated here for a decade or two on how to go about it anyway meanwhile they keep building additional pipelines from the Permian Basin in Texas to the gulf coast, including Kinder Morgan who got tired of hitting the wall here with TMX, which still isnt finished, and is what 10X or more oer original budget?
Comment by
meritmat on Jan 31, 2024 10:46am
No surprise at all. That pipeline would have to go though Quebec and the Libs aren't going to risk losing seats over a pipeline. Still kinda hoping a magical fault opens up and swallows the province whole.
Comment by
jx7000 on Jan 31, 2024 1:17pm
Yup, the current Biden admin waxes eloquent on the looming threats and dangers of man-made climate change (not real) while quietly building out their infrastructure to sell and prosper from the said causes.
Comment by
bttmfischer on Feb 01, 2024 10:34am
There will never be apipeline to the Maritimes, as long as the liberals, and JT will form the government.As you know the head office of CNR is in Montreal(where JT's riding is) and one thing CNR and CP rairoads agree is to block every attempy of having a pipline to the east coast ports of Canada.. They(CN an CP) both make millions from transporting crude oil from the West.