The Epic American Credit and Bond Bubble Laboratory Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: gregor_us who wrote (5892)	1/23/2004 9:28:40 AM
From: Wyätt Gwyön	Read Replies (1) of 110194

I suspect very strongly that this Economy, firstly, is about to get a wake-up call about slackening, consumer demand a very interesting consideration here is the difference between growth in Real Personal Consumption Expenditures and growth in Real Wage and Salary Income. normally after a recession, PCE grows first (pent-up demand), ahead of Income, with the result of a gap between them. this gap is then closed as Income catches up, causing the difference to fall closer to zero. however, in the current post-recession environment, the gap has remained near all time highs on this measure for the longest period since at least the late 1960s. this means there is NO pent-up demand left, and Income growth has not closed the gap with PCE growth. if one accepts that this gap cannot be sustained indefinitely, and if Income does not grow to close it, then the only other options, as i see them, are: 1. falling PCE growth (falling demand) 2. even more debt growth i think Door #1 is most likely. check out page 17 (page 18 in Acrobat Reader) here for a graph of the above gap: hoisingtonmgt.com

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next