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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 399.01

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Dec 19 4:00 PM EST

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To: RetiredNow who wrote (120793)	7/12/2016 12:23:38 PM
From: bart13	Read Replies (2) of 218633

The huge debt overhang from cheap money and the absence of a traditional fiscal policy in the post-credit crisis period are really what the “new normal” has been. The sooner we complete private deleveraging, refinance public debt, and return to traditional fiscal (rather than monetary) policy, the better off we all will be. While I mostly agree with Ritholz about the huge debt overhang from cheap money, I think his view is too simplistic since it doesn't account for (amongst other important factors) the sentiment of many citizens about 1%ers and the establishment. Add in social unrest potentials and trends too. I'm also far from certain that we haven't already completed private deleveraging, as a quick glance at both real estate lending and credit card borrowing will show, as well as total credit stats. As far as monetary policy, he's complaining about QE and extremely low interest rates and the resulting huge gains in stocks and corporate profits since 2009? Yank those on a monetary policy change basis and the likelihood of another crash zooms up...Huh? No question about the need for infrastructure help, but the solution is hugely higher debt via issuance of more 30 yr bonds with the addition of 50 year bonds, along with the current higher taxes for the highest bracket? The world wide reach for yield may help this one, but I'm not a fan of hugely higher federal debt since historically it doesn't end well... even though it would be very beneficial for my net worth.

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