Economic End Game possibilities

Discussion in 'Economics' started by Random.Capital, Aug 8, 2011.

  1. For the sake of argument, I'm curious what the "grumpier" folks out there see as the end game for US equity markets. Here's a broad strokes outline of one possible (likely?) scenario I see, I'd love to hear what some of the rest of you think.

    I would request that people post their own prognostication, rather than take issue with other people's.

    Given the realities of the energy plateau, I see US GDP stabilizing at a point roughly 30% lower than it is today, with only small variations to either upside or downside for at least a couple of decades. Call it $10T GDP. Which I believe comes out to right around $30k per-capita GDP.

    (Yes, this would obviously have huge ramifications for the rest of the world. For starters, China will be starving and quite possibly in civil war.)

    That's roughly a 1997 level of economic activity. Per-capita, Dow averaged about 7k at the time. The lack of growth I treat as a 1/3 hit on multiples, so call it Dow 5k as a level it can more or less stabilize around.
  2. Give me anything that's growing at 1% a year and eventually I'll rule the world (as long as it's costing me less than 1% a year.)
  3. Japan perhaps an example we could look to and see how their printing went.

    "in the second half of the 1980s, rising stock and real estate prices caused the Japanese economy to overheat in what was later to be known as the Japanese asset price bubble. The economic bubble came to an abrupt end as the Tokyo Stock Exchange crashed in 1990–92 and real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5% was slower than growth in other major developed economies, giving rise to the term Lost Decade.

    The problems of the 1990s may have been exacerbated by domestic policies intended to wring speculative excesses from the stock and real estate markets. With government efforts to revive economic growth throughout the 1990s unsuccessful, Junichiro Koizumi adopted policies to promote exports, effectively raising GDP on an average of 2.1% annually from 2003 to 2007. Subsequently, the global financial crisis and a collapse in domestic demand saw the economy shrink 1.2% in 2008 and 5.0% in 2009. Japan has the highest gross public debt in the world with 225% of GDP."
  4. End Medicare, this financial money pit is an absurd idea. Giving a 93 year old a defibrillator implant costing the government $40k is ridiculous.

    Govt needs to spend money on things that have some economic benefit or value to society. Spending money on old people to keep them alive just to sit around and watch tv is absurd.
  5. trivia thinking.

    phony illness making health "care", prisons, police, TSA, and military spending are calculated into GDP. which represent the decrease in standards of living, not increase.
  6. also, stop thinking about energy plateau and start thinking about the Civil War and Gone with the Wind.

    Stop thinking about people caught in elevators and families wandering down dangerous streets looking for food and water.

    Just think about it. We fought a whole war, moved troops and supplies from here to there, and people who weren't destroyed lived in houses so beautiful, builders and architechs today can't duplicate, all with no oil, no electricity, no solar panels, no nothing but a telegraph.
  7. "grumpier" folks

    Do you mean folks that do not believe in your Liberal Bullshit? Do you mean folks that think the SCUM in America are free loaders and liberals? Do you mean Folks that understand SOCIALISM is not the way to go? Do you mean folks that are not willing to give up over 50% of their hard earn dollars for idiots who champion OBAMA and his social policies?

    Do you mean the Grumpier Folks who are willing to fight for the constitution, freedom and Small Businesses?

    Not sure what you mean by grumpier folks?

    Oh you must mean all the fooking tools on ET who to work, live and breath the Global Economic/Trading World, like they are in any career path that has 1% of any interest on what is going on. Right?

    Or do you mean the RETIRED folk here on ET getting bitch slap't why they sell cover calls on their 401k, i mean 101k now.
  8. Hey oldtime - I personally think that once we get past the dislocation - life may well be pretty damn amazing. Imagine all our knowledge coupled with "local" sourcing and lower population density. We in North America, and to a large extent western Europe, are in a really good place, to be honest.

    There is a lot to be said for old-time living. This weekend I caught my first fish dryflying - it was a pretty awesome moment. :) Less debt, less "job", more time providing for your own direct needs - could be a whole lot worse.

    (Says the guy with 40 chickens in the freezer and 4 pigs wandering the woods.)
  9. And there is the issue. Nothing can grow perpetually at 1%.
  10. And there is the issue. Nothing can grow perpetually at 1%.

    YES, that is why one needs to learn to be pro-active with their money.

    Take profits, roll money into other areas and not time the market but be sensible. By and hold BROKER mentality is a joke. Dealing with any of these Fund Managers are a joke.

    Learn to handle your own money and remember that rule....nothing can grow perpetually at any %.
    #10     Aug 8, 2011