Hi ACF Mike, <<Right now we have solid growth, high productivity and low inflation>>
To quote Bill Bonner, 'Amazon is a river of no returns, and Denial is not a river in Egypt'.
Right now, growth is big government led, frivolous consumption supported, debt fueled, and devoid of profit, which is bad for now, and devoid of productive investment, which is horrible for the future, deserving a P/E that is perhaps 60-70% down from current levels.
Productivity is meaningless in the context of production paucity, high paying jobs disappearance, domestic and long-term capital formation vaporization.
Inflation? we shall see. The inflation in housing is plenty high already, and in some essential services as well. Previously, paper assets.
<<The stock market will not ignore these fundamentals indefinitely>> ... you may be right, and the market will weigh these fundamentals against the balance sheet, dollar trend, taxation momentum, big government wind, etc, and then decide, in a surging mass, in panic, to either buy or sell.
<<2002 is very different from 1929 or 1970>> ... we agree on this statement. I think we have a good chance of doing as well as 1929, and a better probability of doing less well than 1970.
Chugs, Jay |
