America does not have recessions anymore! Oh come on now, why would anyone be afraid of a little upcoming demographic headwind in the United States and other developed countries or overall credit expanding faster than the real GDP? The Fed knows how to ease and are probably constantly thinking of new ways to keep this thing going. If you are really worried, be conservative with your leverage. Because of Fed intervention, the timing and extent of any downturn is impossible to predict. I would become concerned if the yield curve turned negative, if the SP500 dropped more than 10%, new employment claims rose in a sustained manner accounting for seasonality, and or the dry Baltic freight index had a significant drop not related to capacity increases or seasonality. If the Fed and our trusty politicians can't save us, the next downturn could be yuge.
Or, in my opinion, more like 2029, which curiously enough would make it nicely synchronized with the 1929 crash on a century time clock.. In the meantime countless Youtube videos, newsletters, pamphlets, books and blogs will predict a crash. The beauty of my prediction lies in simple arithmetic. I'll be long dead in 2029! The big problem the U.S. is facing, the elephant in the room, is a wealth distribution that is fast approaching that of feudal Europe. The country is already an outlier among industrialized nations. Current initiatives being proposed in Washington D.C. will exacerbate the problem of only a few owning everything. The country will be gripped with indecision, such as whether to buy a back-up Learjet. Eventually this will end badly for the U.S., but when? 2029?
Both the Congress and the Fed can start fires and extinguish them. The modern Fed has, with the acquiescence of Congress, proven capable, of extinguishing a fire it did not start but allowed to burn out of control. There are, however, blazes that Congress could ignite that the Fed would be powerless, on its own, to extinguish. [When I write Fed in this particular context, I mean both the Treasury and Fed working in consort, as they do. For some purposes one needs to combine their balance sheets and consider only the consolidated sheet, and for other purposes, one must look at them separately.]
It's a little scary, hadn't logged into my 401k for a few months and I'm suddenly up 22 %. It's getting bubblicious.