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End of Golden Era for Investors Spells Troubles

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Re: End of Golden Era for Investors Spells Troubles

#131

Post by pessimizer »

touristtam wrote: post #69
justinjlynn wrote: post #8

Earlier quoted context omitted.

Well, I didn't say that Gen X got nothing at all. We all got hurt in some way by the GFC. Of course to generalise about an entire generation people is egregiously pointless. At the same time, simply due to the luck of timing, it feels as though Gen X had more of a chance to do something about it. However, they did not and in fact they had much more of an opportunity to take advantage of the selfish and short-sighted…

> it feels as though Gen X had more of a chance to do something about it But they didn't had that chance to begin with. The predictions were as bad back then than they are now; back in the 80s the collapse of the market economy was predicted for shortly after 2000, and in the 90s, it was pushed back to as early as 2020 and as late as 2040. Last I have checked western countries are still on course to default by the mi…

In the US, the collapse has been held off by maintaining a vast trade deficit and inflating asset bubbles. Government borrowing isn't the problem in the US, it's national borrowing. According to traditional trade theory, developed economies should be consistently running trade surpluses. Thanks, Reagan.

Allowing the dollar to weaken, and digging out the entrenched interests in US health care would fix everything. It's just that a weak dollar and lower health care spend is a problem for the rich, and the petty bourgeoisie have thus far mindlessly supported them. (Because racists.)

http://www.tradingeconomics.com/united-states/balance-of-tra...

Re: End of Golden Era for Investors Spells Troubles

#132

Post by Retric »

jordanb wrote: post #119
Retric wrote: post #103

Earlier quoted context omitted.

First, there is a giant spike of exports from ~1944 to 1952 where exports hit ~5% GDP over imports. This brought a lot of money not just to businesses, but also individual households. Imports only really grow past exports in ~1975. Second, %GDP just says how much money exchanged hands. The important number for wealth accumulation is value capture. Aka Profit not Revenue. China has a huge chunk of worldwide manufactur…

Those exports were lend/lease and the Marshall plan. They were funded with US Govt. debt. Which is to say, they were funded with domestic stimulus spending.

Total government debt was dropping over that time period.

Re: End of Golden Era for Investors Spells Troubles

#133

Post by Retric »

st3v3r wrote: post #130
Retric wrote: post #84

Earlier quoted context omitted.

US still has a significant chunk of WWII debt after one of the greatest sustained economic booms of all time. Growth really is not the answer. Inflation sounds great, just default without technically defaulting, until you actually see what it does to the economy. The real solution is to simply spend vastly less money accepting that pain now is better than letting the US become a failed state.

"The real solution is to simply spend vastly less money accepting that pain now is better" Said someone who's probably not going to feel much of that pain. The problem with a lot of these "cut spending" mantras is that they usually want to do it in a way that hurts those on the bottom of society most, which is extremely appalling. And many of those "cut spending" people actually want to increase military spending.

IMO, reducing military spending by 2% total GDP is the safest way to cut right now.

Re: End of Golden Era for Investors Spells Troubles

#134

Post by kabouseng »

TheCoelacanth wrote: post #107
kabouseng wrote: post #96

Earlier quoted context omitted.

I doubt the people or Iraq, Iran, Afghanistan, Korea, Vietnam, Liberia, Sierra Leone, Bosnia, Kuwait, Somalia, SAR or Serbia would agree with you, to name just a few... If I may ask, how do you get to your statement? Is there some metric one can look at to determine it?

Because those regions were so much more peaceful when the Mongols or the Ottomans or the crusaders were rampaging through them /s I'm not saying that there isn't localized violence, just that global level is down. Stephen Pinker's The Better Angels of our Nature is one source to support this idea.

No I was genuinely wondering what is the basis for that statement (I have heard it before), or if it was just sentiment. I'll add Stephen Pinker's book to my reading list.

Yes it's an old debate whether the US should have gotten involved in all these conflicts, but back to your original point:

That the US national debt has increased dramatically in peace time.

My point is that it is not peace time, and that a substantial part of that debt stems from the US's military industrial complex. It is after all not nothing that (famous tv saying) "the US spends more on defense than the next 26 countries combined" or something like that.

Re: End of Golden Era for Investors Spells Troubles

#135

Post by partiallypro »

Amezarak wrote: post #70
cm2187 wrote: post #14

I think it can get much worse than that. I don't know why people think the current levels of accumulation of debt are sustainable but there is a limit to what even the US can roll in term of debt. All developped nations are at around 100% debt to GDP, more than 200% if you include private debt, and growing at 3-5% per annum. Now does anyone really think that sometime soon any developped country will start making publ…

The US federal debt was even higher in the wake of World War II. The US government did not run surpluses and deleverage in the following decades. The economy grew, without hyperinflation, and the debt became irrelevant. The solution to high levels of debt is sustainable economic growth, not deleveraging. Mass deleveraging would be an economic catastrophe.

Debt markets were a lot different in WWII, currently key rates are at 0%, most government debts are being taken on by central banks. Deleveraging isn't a good option, because it can cause deflation...however, if we look at markets like Japan, their increased debt burden and NIRP policy, is effecting currency markets heavily. There is no good solution. Taking on more debt can push the string, and we can pray for economic growth to cover it, we can deleverage and cause a depression, or we can try to keep at near current levels of GDP. There is no good solution.

Given that there is no good solution, I feel policy makers are much more prone to making massive mistakes that cause asset misallocation which will force deleveraging in private markets when that pops.

Re: End of Golden Era for Investors Spells Troubles

#136

Post by codingdave »

nostrademons wrote: post #34
joosters wrote: post #32

Earlier quoted context omitted.

In either case, you'd want to sell your shares and invest the money somewhere better. If you believe the article, that is.

I think part of the article's point is that there is no better place to put your money, and that we are likely to see reduced returns to capital across all asset classes. It is possible to have a glut of both capital and labor if there's no innovation in the economy. (Conversely, this makes it a great time to be an entrepreneur if you have a good idea, but part of the article's point is that most of the low-hanging p…

But then a question is whether the risk profiles for various investments will change - high risk/high reward is one thing, but high risk/low reward is not worth it. So it would be interesting to see what the experts think on how low risk investments will perform vs. high risk, and if those differences are diminishing, how that might impact decisions on one's portfolio.

Re: End of Golden Era for Investors Spells Troubles

#137

Post by nodamage »

Retric wrote: post #84
Amezarak wrote: post #70

Earlier quoted context omitted.

The US federal debt was even higher in the wake of World War II. The US government did not run surpluses and deleverage in the following decades. The economy grew, without hyperinflation, and the debt became irrelevant. The solution to high levels of debt is sustainable economic growth, not deleveraging. Mass deleveraging would be an economic catastrophe.

US still has a significant chunk of WWII debt after one of the greatest sustained economic booms of all time. Growth really is not the answer. Inflation sounds great, just default without technically defaulting, until you actually see what it does to the economy. The real solution is to simply spend vastly less money accepting that pain now is better than letting the US become a failed state.

> The real solution is to simply spend vastly less money accepting that pain now is better than letting the US become a failed state.

Are you familiar with the Reinhart-Rogoff controversy in economics from a few years ago?

Re: End of Golden Era for Investors Spells Troubles

#138

Post by fapjacks »

paavokoya wrote: post #123
Retric wrote: post #84

Earlier quoted context omitted.

US still has a significant chunk of WWII debt after one of the greatest sustained economic booms of all time. Growth really is not the answer. Inflation sounds great, just default without technically defaulting, until you actually see what it does to the economy. The real solution is to simply spend vastly less money accepting that pain now is better than letting the US become a failed state.

>accepting that pain now is better than letting the US become a failed state. If you look throughout history, there has never been any nation or empire that has ever done this. The US will fail just as Rome and others before it.

Right. Those history books are a fucking crystal ball. It's all right there for anybody to see.

Re: End of Golden Era for Investors Spells Troubles

#139

Post by CompelTechnic »

tonyedgecombe wrote: post #60
darawk wrote: post #28

Earlier quoted context omitted.

I don't think they're claiming that prices will collapse (which is what you would want to short on), but rather that returns will collapse. That over time, the return of say, the S&P 500 will be half of what it has been over the previous 20 years.

If returns collapse then prices will too, investments are made based on expected returns, if those returns aren't available then the investments won't be made.

OR...

P/E ratios will continue to climb into the stratosphere, continuing to chase smaller and smaller yields.

There's a lot of money sitting in the world, looking to be invested. If it doesn't get invested at all, it will shrink- and no investor wants that.

Re: End of Golden Era for Investors Spells Troubles

#140

Post by [deleted] »

arca_vorago wrote: post #114

What is really going on is that the uberwealthy elite (.01%) have built their empires on exploiting third world countries via central bank douchbaggery and IMF corruption. (to elaborate on that point alone is a thesis paper waiting to happen) Now that all the third worlds have been exploited into the ground, and the cannibals have no new prey, they are turning inward on their own populations, and are already in the p…

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