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Trader: Things Have Changed And Here’s Where The World Is Going Next…
By Kevin Muir of “The Macro Tourist” fame; reposted here with permission
Today’s post is sure to anger a bunch of you. My libertarian friends (you know who you are) will probably be the most outraged, but I suspect many will misinterpret my observations about society’s most likely path as my belief regarding the proper course. So let me try to be clear. I have no interest in asserting I know what should be done, but rather I am focused on what will be done. If you want to debate
So where would that lead? Smaller CB balance sheets & more bureaucrats & entitlements. Bigger Govt which is unbelievably inefficient. Which is a waste of resources. It’s all soooo unfortunate
Economic dynamics does not posses the homogeneity implicit in the aforementioned thesis. Imagine a globe with all debtor nations. Ya. Now imagine a trajectory trying to get there. See?
I suppose it becomes a race. Raise rates first or get left in the dust, the first to start get the more valuable currencies and therefore the more desirable debt instruments. You get one big game of musical chairs. The music stopped… everybody try to get a seat.
Would be very interested to see an overlay of GDP on your chart of annualized federal spending growth. The other bar chart that would interest me in this graph would be timing and extent of other (including personal) tax cut enactments, given the current 70% GDP dependent on consumer spending. In an ideal world, wage growth effect would also be interesting, but this may have less meaningful correlation since increasing market financialization and buybacks have blunted what historically would have contributed to positive GDP and wage growth relationship. Thanks.
https://www.hudson.org/research/12714-economic-growth-by-president
reagan 81-88 3.5%
bush 89-92 2.3%
clinton 93-00 3.9% these are all real gdp looks like GOP spend at twice the rate, yet results are mixed
w bush 01-08 2.1%
obama 1.5%