@derryb said:
As illustrated in the Dark Money chart above, equities, since the last financial crisis, have grown in tandem with the FED's balance sheet (new money). Coincidence? Not hardly. Price manipulation? You betcha. Question now is what will the FED use as a potency pill to keep it up.
Hard to believe that for 90 years equities went up without "FED" help, but now they are only up because of the FED? Yeah, that's a dumb and ignorant notion
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
As illustrated in the Dark Money chart above, equities, since the last financial crisis, have grown in tandem with the FED's balance sheet (new money). Coincidence? Not hardly. Price manipulation? You betcha. Question now is what will the FED use as a potency pill to keep it up.
Hard to believe that for 90 years equities went up without "FED" help, but now they are only up because of the FED? Yeah, that's a dumb and ignorant notion
Equities were growing at a 3% to 4% rate for many decades with little or no Fed assistance. The 9% to 10% growth we've seen in recent decades has certainly been goosed.
How much it's been goosed will be revealed in coming decades; The rate of growth will likely return to around 4% which is still quite good.
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
I didnt add up and compute the GDP growth rate, but a cursory glance doesnt really look like 6% for the time period you mention. Massive growth during the early 40's, of course, but thats an anomaly.
SP500 was 13.4 in 1927 and 264.4 in 1987 which computes to 5.1% per year. Add in a 3-4% dividend and you get 9%.
http://www.multpl.com/us-population-growth-rate/table/by-year ....this simple assemblage of numbers will tell you everything you need to know about why GDP is slower now than in the 1950s-1980s and why politicians are blowing smoke up your a$$ in regards to 4-6% attainable and consistent growth. It also explains the accelerated move in equities beginning in 1982. Similar global trends and the fall of communism added fuel in the 1990s.
And another interesting fact for the doomsayers expecting an economic and stock market crash would be to look at GDP growth in 1954 and the returns of equities in 1954. For the lazy...GDP was down 0.6% yet the SP500 was up 40%. Dang, facts hurt!!
@derryb said:
And, according to the Bank of International Settlements one out of ten corporations in emerging and advanced countries could not survive without a flow of cheap financing. Not only has new money from the FED driven equities, so has cheap money.
So 90% of companies have no financing problems? Dang, thats pretty good. Hmmm, I wonder the historical norm might be?
@derryb said:
And, according to the Bank of International Settlements one out of ten corporations in emerging and advanced countries could not survive without a flow of cheap financing. Not only has new money from the FED driven equities, so has cheap money.
So 90% of companies have no financing problems? Dang, thats pretty good. Hmmm, I wonder the historical norm might be?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
And, according to the Bank of International Settlements one out of ten corporations in emerging and advanced countries could not survive without a flow of cheap financing. Not only has new money from the FED driven equities, so has cheap money.
So 90% of companies have no financing problems? Dang, thats pretty good. Hmmm, I wonder the historical norm might be?
Your article really has very little economic bearing. Retail sales are simply shifting to online. Retail sales are quite strong which can be documented quite easily with a Google search. Have at it.
But if you choose to ignore the obvious, ask yourself how the economy fared after the "highest number in 2011".
Retail bankruptcies in 2017 alone will cost over 127,000 jobs, plus the related jobs involving manufacturing and supplers. Sears is at the top of the "threatened" list with 140,000 employees, plus suppliers. If you think all these people are gonna find on-line retail employment I've got some US dollars I'll sell ya.> @cohodk said:
@derryb said:
And, according to the Bank of International Settlements one out of ten corporations in emerging and advanced countries could not survive without a flow of cheap financing. Not only has new money from the FED driven equities, so has cheap money.
So 90% of companies have no financing problems? Dang, thats pretty good. Hmmm, I wonder the historical norm might be?
Your article really has very little economic bearing. Retail sales are simply shifting to online. Retail sales are quite strong which can be documented quite easily with a Google search. Have at it.
Retail bankruptcies in 2017 alone will cost over 127,000 jobs, plus the related jobs involving manufacturing and supplers. Sears is at the top of the "threatened" list with 140,000 employees, plus suppliers. If you think all these people are gonna find on-line retail employment I've got some US dollars I'll sell ya. Unemployment and further government assistance have a very strong bearing on the condition of the economy.
But if you choose to ignore the obvious, ask yourself how the economy fared after the "highest number in 2011".
In 2011 the FED's balance sheet was approx. $2.8 trillion and currently sits at approx. $4.5 trillion. I would have expected at least a chicken in every pot with the additional $1.7 trillion bailout since 2011.
The economy is not as great as you have been told and is only showing some temporary improvement because of FED intervention. Unfortunately this intervention has only kicked the can down the road because those that want to get re-elected or re-appointed have not dealt with the cause - irresponsible debt. But this time it's different, right?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
The S&P data is very similar. In the 1980's the transfer of all monies to the top began under Reagan but was inevitable regardless of who was in charge. For many decades the American people have been being divided into the "haves" and the "have-nots". Most of the "have-nots" in this country live fairly well (and very well by historical standards) but the storyline is the same.
We are rapidly approaching the day of reckoning. The impending tax cuts will exacerbate the situation.
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
@Baley said:
It's pretty easy to be a big proponent of the stock market if one is about 50 years old, eh cohodk?
What a great 3 decades to have been an investor.
The 30 year olds, 40s, 60s, 70s, 80s, 90s and even 100 year olds are big proponents.
I know a guy who was give $2500 worth of a large transportation company (boring ), in the 1960s that is today worth over $6 million. And he didn't even reinvest the dividends. Dang productive assets.....always ruining irrational discouragement.
@derryb said:
Retail bankruptcies in 2017 alone will cost over 127,000 jobs, plus the related jobs involving manufacturing and supplers. Sears is at the top of the "threatened" list with 140,000 employees, plus suppliers. If you think all these people are gonna find on-line retail employment I've got some US dollars I'll sell ya.> @cohodk said:
Add them to the poor buggy whip makers, blacksmiths, chimney sweeps, fountain pen manufacturers, carburetor makers, cartographers, ect.
Dang economy keeps right on tickin.
All the junk that Sears makes will just be produced and sold by someone else who can do it better and cheaper. The demand for washers and dryers and cheap clothes doesn't disappear.
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
@Baley said:
It's pretty easy to be a big proponent of the stock market if one is about 50 years old, eh cohodk?
What a great 3 decades to have been an investor.
Yes indeed. A seismic shift occurred about 30 years ago where good returns became great. The 9% average yield over the last 30 years could easily be bumped to 11%-12% with dividends.
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
Yes, you can pick and choose dates to try to prove a point, such as you did in choosing 1985 instead of 1987 as you previously did. The fact remains that total return was 9% before 1985 just as it is after. Why don't you argue that something must have changed in 1947 because for the previous 40 years the SP500 only doubled, but for the next 40 years it went up over 16 fold?
The acceleration in price was due to the baby boomers coming of age and creating families, the fall of communism and bringing 300 million Eastern Europeans into the 20th century, China, govt deficit spending, and increased productivity through technological innovation. No conspiracy. No manipulation. No FED intervention. Just pure increased demand and ease of supply.
I think what you've proven though, is that over many economic cycles including depressions, wars, political events, commodity distruptions, technological advance and labor displacement, equities have outperformed other asset classes.
All the junk that Sears makes will just be produced and sold by someone else who can do it better and cheaper.
Yepper, foreign workers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
Yes, you can pick and choose dates to try to prove a point, such as you did in choosing 1985 instead of 1987 as you previously did. The fact remains that total return was 9% before 1985 just as it is after. Why don't you argue that something must have changed in 1947 because for the previous 40 years the SP500 only doubled, but for the next 40 years it went up over 16 fold?
The acceleration in price was due to the baby boomers coming of age and creating families, the fall of communism and bringing 300 million Eastern Europeans into the 20th century, China, govt deficit spending, and increased productivity through technological innovation. No conspiracy. No manipulation. No FED intervention. Just pure increased demand and ease of supply.
Just pure increased demand and ease of supply.
What happened, and is happening, can be described many ways. "Just pure" would be the last way I would describe these events.
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
Yes, you can pick and choose dates to try to prove a point, such as you did in choosing 1985 instead of 1987 as you previously did. The fact remains that total return was 9% before 1985 just as it is after. Why don't you argue that something must have changed in 1947 because for the previous 40 years the SP500 only doubled, but for the next 40 years it went up over 16 fold?
The acceleration in price was due to the baby boomers coming of age and creating families, the fall of communism and bringing 300 million Eastern Europeans into the 20th century, China, govt deficit spending, and increased productivity through technological innovation. No conspiracy. No manipulation. No FED intervention. Just pure increased demand and ease of supply.
Just pure increased demand and ease of supply.
What happened, and is happening, can be described many ways. "Just pure" would be the last way I would describe these events.
You don't think that the Fed's balance sheet has exploded over the past x number of years? Money isn't Pavlovian, it doesn't venture out until it thinks it's safe to do so. The stock market reflects money that has ventured out, but not necessarily because of the Fed's recent policies. Just because the Fed is trying to bump rates up ever-so-slightly, it doesn't mean that there's no debt bomb. There is, and complacency is not your friend.
Q: Are You Printing Money? Bernanke: Not Literally
Have gold bugs actually been the complacent ones.....willing to sit around and wait, rather than be proactive and take advantage of the very situation they blame?
It really only takes a week to convert between asset classes, or maybe seconds for those that trust a computer.
@Baley said:
The thing about having a balanced chair with 4 legs, one can easily shift the weight.
I'd hate to be a pogo stick investor, bouncing all around, one wrong move from disaster...
The world record for pogo stick bouncing is 20 hours 13 minutes while the world record for sitting is 72 hours. Which one had a more enjoyable experience?
It's only a pogo stick if you operate it like one.
Who's waiting, and for what? I for one, live my life every single day without second-guessing my strategy for diversification of the market risk in metals over time. Since I trust the metals markets more than I trust any other avenue for storing my hard-earned wealth, it only makes sense to lean more heavily in that direction. Opinions may vary.
I did step out of my comfort zone a little in buying some investment property (location, location, location), and I'm already questioning the wisdom of doing that. I know that my metals will most likely always be liquid, not so much with the property.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
It's only a pogo stick if you operate it like one.
Who's waiting, and for what? I for one, live my life every single day without second-guessing my strategy for diversification of the market risk in metals over time. Since I trust the metals markets more than I trust any other avenue for storing my hard-earned wealth, it only makes sense to lean more heavily in that direction. Opinions may vary.
I did step out of my comfort zone a little in buying some investment property (location, location, location), and I'm already questioning the wisdom of doing that. I know that my metals will most likely always be liquid, not so much with the property.
Oooo, do tell more! I loves me my investment properties, and am starting to consider another, after recent extensive upgrades to one of them.
Tho maybe we should move our specifics to the jmskiville thread..
@VanHalen said:
Tell me about it. I feel like I'm 60 some days.
In the 30 years since I graduated from college the U.S. economy has grown by an average of 4.5% per year. Excellent by any measure. Meanwhile the U.S. equity markets have grown by 9%+ per year over the same period.
Holey compound interest Batman! Just a little humor for your Sunday night.
Equity markets have returned 9% per year for more than 30 years. Its a trend that has doomed the doomsayers for a century.
It is amazing. For many decades until the mid-1980's equity market growth trailed GDP growth nearly 50%. See 1927 to 1987 where GDP grew an average of ~6%/year while U.S. equities grew at a ~3% annual rate.
For the last 30 years the numbers have inversed and U.S. equities have grown at a 9%+ rate while GDP has struggled to average 4% (the 4.5% quote was a tad high).
See what happened in the mid-1980's to send equities on a crazy ride to the moon? Here's the DJIA for the last 90 years.
Your numbers are incorrect VanHalen. Ill lay it out here..
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
Yes, you can pick and choose dates to try to prove a point, such as you did in choosing 1985 instead of 1987 as you previously did. The fact remains that total return was 9% before 1985 just as it is after. Why don't you argue that something must have changed in 1947 because for the previous 40 years the SP500 only doubled, but for the next 40 years it went up over 16 fold?
The acceleration in price was due to the baby boomers coming of age and creating families, the fall of communism and bringing 300 million Eastern Europeans into the 20th century, China, govt deficit spending, and increased productivity through technological innovation. No conspiracy. No manipulation. No FED intervention. Just pure increased demand and ease of supply.
Just pure increased demand and ease of supply.
What happened, and is happening, can be described many ways. "Just pure" would be the last way I would describe these events.
"Asset bubbles ALWAYS burst, triggering crises. As a result of this, with each success boom and bust, the Fed is forced to engage in more and more extreme monetary policies to prop up the financial system."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
I know a guy who was give $2500 worth of a large transportation company (boring ), in the 1960s that is today worth over $6 million. And he didn't even reinvest the dividends. Dang productive assets.....always ruining irrational discouragement.
Wow, it only took 50+ years?!?!? Wow, that's great. $100 worth of Bitcoin 9 years ago is worth $27million today.
@ Elite CNC Routing & Woodworks on Facebook. Check out my work. Too many positive BST transactions with too many members to list.
"In all, we'd say Wall Street is calling the sheep to the final slaughter."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@cohodk said:
I know a guy who was give $2500 worth of a large transportation company (boring ), in the 1960s that is today worth over $6 million. And he didn't even reinvest the dividends. Dang productive assets.....always ruining irrational discouragement.
Wow, it only took 50+ years?!?!? Wow, that's great. $100 worth of Bitcoin 9 years ago is worth $27million today.
And tomorrow someone will turn $1 into $300 million. Be careful guitarwares.
As soon as this mother of all bubbles bursts, i plan to use it to buy all of the world's real estate, and stocks, as well as all of the bitcoins. Not to mention all of the booze and rib eyes. Party in Baleyville, all thanks to this one thin silver dime...
The common thread in the lead up to all US financial crisis has been easy money. Since 2008, the FED has ensured that money has never been easier. Be prepared.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
overdue and badly needed. Let's not forget WHY wage increases are necessary; declining strength of the currency's purchasing power. Sound monetary policy would eliminate the need for a band aid every few years.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
And wages have increased just as some of us knew they would, and have been. Remember what you got paid for your first job? Mine was $3.35/ hour doing heavy labor. Now you can stock shelves in Wall yWorld for $11/hour. And we yearn for the good old days?
Fiat currencies are designed to depreciate...that's what spurs productivity grown and investment. These are all good things.
Sound monetary policy isn't the Fed, it's your elected officials. What a stupid lot we all are....doing the same thing every 4 years hoping for a different outcome.
You want change? Then how about if no one shows up at the polls? How about if no one files a tax return? You think that would get "their" attention? Of course it would, but we're all stupid, not knowing our collective strength.
unfortunately rising wages always lag behind rising prices. Wages get raised because there is a need to raise. Imagine if there were no need.
Stabilizing prices is one of the mandates imposed on the FED by congress.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@derryb said:
unfortunately rising wages always lag behind rising prices. Wages get raised because there is a need to raise. Imagine if there were no need.
Stabilizing prices is one of the mandates imposed on the FED by congress.
For 80% of America where the rank and file work and live wages haven't come close to keeping up with inflation. This has been going on for decades and, despite anecdotal evidence of a handful of wage increases going primarily to those who already have the highest wages/incomes, will continue as income inequality continues to expand.
Comments
Hard to believe that for 90 years equities went up without "FED" help, but now they are only up because of the FED? Yeah, that's a dumb and ignorant notion
Knowledge is the enemy of fear
or another reason to expect a crash.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Its been quite a run. Too bad you missed it.
Knowledge is the enemy of fear
Equities were growing at a 3% to 4% rate for many decades with little or no Fed assistance. The 9% to 10% growth we've seen in recent decades has certainly been goosed.
How much it's been goosed will be revealed in coming decades; The rate of growth will likely return to around 4% which is still quite good.
Your numbers are incorrect VanHalen. Ill lay it out here..
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html ....the bottom of this page will show you SP500 returns from 1928-2016, 1967-2016, and 2007-2016. Market returns are quite consistent over time. Unfortunately your notion is incorrect.
https://www.thebalance.com/us-gdp-by-year-3305543
I didnt add up and compute the GDP growth rate, but a cursory glance doesnt really look like 6% for the time period you mention. Massive growth during the early 40's, of course, but thats an anomaly.
http://www.multpl.com/s-p-500-historical-prices/table/by-year
SP500 was 13.4 in 1927 and 264.4 in 1987 which computes to 5.1% per year. Add in a 3-4% dividend and you get 9%.
http://www.multpl.com/us-population-growth-rate/table/by-year ....this simple assemblage of numbers will tell you everything you need to know about why GDP is slower now than in the 1950s-1980s and why politicians are blowing smoke up your a$$ in regards to 4-6% attainable and consistent growth. It also explains the accelerated move in equities beginning in 1982. Similar global trends and the fall of communism added fuel in the 1990s.
And another interesting fact for the doomsayers expecting an economic and stock market crash would be to look at GDP growth in 1954 and the returns of equities in 1954. For the lazy...GDP was down 0.6% yet the SP500 was up 40%. Dang, facts hurt!!
Knowledge is the enemy of fear
So 90% of companies have no financing problems? Dang, thats pretty good. Hmmm, I wonder the historical norm might be?
Knowledge is the enemy of fear
Retail bankruptcies hit highest number since 2011
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Darn you Amazon!!
Your article really has very little economic bearing. Retail sales are simply shifting to online. Retail sales are quite strong which can be documented quite easily with a Google search. Have at it.
But if you choose to ignore the obvious, ask yourself how the economy fared after the "highest number in 2011".
Knowledge is the enemy of fear
Retail bankruptcies in 2017 alone will cost over 127,000 jobs, plus the related jobs involving manufacturing and supplers. Sears is at the top of the "threatened" list with 140,000 employees, plus suppliers. If you think all these people are gonna find on-line retail employment I've got some US dollars I'll sell ya.> @cohodk said:
Retail bankruptcies in 2017 alone will cost over 127,000 jobs, plus the related jobs involving manufacturing and supplers. Sears is at the top of the "threatened" list with 140,000 employees, plus suppliers. If you think all these people are gonna find on-line retail employment I've got some US dollars I'll sell ya. Unemployment and further government assistance have a very strong bearing on the condition of the economy.
In 2011 the FED's balance sheet was approx. $2.8 trillion and currently sits at approx. $4.5 trillion. I would have expected at least a chicken in every pot with the additional $1.7 trillion bailout since 2011.
The economy is not as great as you have been told and is only showing some temporary improvement because of FED intervention. Unfortunately this intervention has only kicked the can down the road because those that want to get re-elected or re-appointed have not dealt with the cause - irresponsible debt. But this time it's different, right?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I have a hard time looking at this and concludinging market returns are "quite consistent over time".
Returns have been 10%+ for the last 30 years. They were sub-5% for the preceding 70 years.
The S&P data is very similar. In the 1980's the transfer of all monies to the top began under Reagan but was inevitable regardless of who was in charge. For many decades the American people have been being divided into the "haves" and the "have-nots". Most of the "have-nots" in this country live fairly well (and very well by historical standards) but the storyline is the same.
We are rapidly approaching the day of reckoning. The impending tax cuts will exacerbate the situation.
It's pretty easy to be a big proponent of the stock market if one is about 50 years old, eh cohodk?
What a great 3 decades to have been an investor.
Liberty: Parent of Science & Industry
No they werent. Simple math will prove this. Research the price of the SP500 for every year and compute returns over any time period you like.
As far as the graph I would encourage you to know the difference between arithmetic and logarithmic charts. There you will find the truth.
Knowledge is the enemy of fear
The 30 year olds, 40s, 60s, 70s, 80s, 90s and even 100 year olds are big proponents.
I know a guy who was give $2500 worth of a large transportation company (boring
), in the 1960s that is today worth over $6 million. And he didn't even reinvest the dividends. Dang productive assets.....always ruining irrational discouragement.
Knowledge is the enemy of fear
Add them to the poor buggy whip makers, blacksmiths, chimney sweeps, fountain pen manufacturers, carburetor makers, cartographers, ect.
Dang economy keeps right on tickin.
All the junk that Sears makes will just be produced and sold by someone else who can do it better and cheaper. The demand for washers and dryers and cheap clothes doesn't disappear.
Knowledge is the enemy of fear
Okay, here you go from your link: multpl.com/s-p-500-historical-prices/table/by-year
S&P 500 was 7.48 on 01/01/1915. On 01/01/1985 it was 171.6. That's 4.58% average annual growth over 70 years. Any online compound interest calculator will confirm the 4.58%.
On 12/19/2017 it was 2693. We'll call that 33 years for round numbers, so 171.6 to 2693 over 33 years yields 8.7%. Dividend yields have been removed from both calculations.
The inflection point in the mid-1980's occurs for the DJIA as well.
Yes indeed. A seismic shift occurred about 30 years ago where good returns became great. The 9% average yield over the last 30 years could easily be bumped to 11%-12% with dividends.
We are talking about the return on equities over a long period of time and dividends must be accounted for. You can see in the link below that dividend yield averaged about 4.5% until the 1980s which gave a total return of about 9%. https://www.quandl.com/data/MULTPL/SP500_DIV_YIELD_MONTH-S-P-500-Dividend-Yield-by-Month
Yes, you can pick and choose dates to try to prove a point, such as you did in choosing 1985 instead of 1987 as you previously did. The fact remains that total return was 9% before 1985 just as it is after. Why don't you argue that something must have changed in 1947 because for the previous 40 years the SP500 only doubled, but for the next 40 years it went up over 16 fold?
The acceleration in price was due to the baby boomers coming of age and creating families, the fall of communism and bringing 300 million Eastern Europeans into the 20th century, China, govt deficit spending, and increased productivity through technological innovation. No conspiracy. No manipulation. No FED intervention. Just pure increased demand and ease of supply.
Knowledge is the enemy of fear
I think what you've proven though, is that over many economic cycles including depressions, wars, political events, commodity distruptions, technological advance and labor displacement, equities have outperformed other asset classes.
Knowledge is the enemy of fear
Yepper, foreign workers.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Just pure increased demand and ease of supply.
What happened, and is happening, can be described many ways. "Just pure" would be the last way I would describe these events.
Blame your Unions.
Knowledge is the enemy of fear
Nothing is artificial. Everything is.
Knowledge is the enemy of fear
You don't think that the Fed's balance sheet has exploded over the past x number of years? Money isn't Pavlovian, it doesn't venture out until it thinks it's safe to do so. The stock market reflects money that has ventured out, but not necessarily because of the Fed's recent policies. Just because the Fed is trying to bump rates up ever-so-slightly, it doesn't mean that there's no debt bomb. There is, and complacency is not your friend.
I knew it would happen.
Have gold bugs actually been the complacent ones.....willing to sit around and wait, rather than be proactive and take advantage of the very situation they blame?
It really only takes a week to convert between asset classes, or maybe seconds for those that trust a computer.
Knowledge is the enemy of fear
The thing about having a balanced chair with 4 legs, one can easily shift the weight.
I'd hate to be a pogo stick investor, bouncing all around, one wrong move from disaster...
Liberty: Parent of Science & Industry
The world record for pogo stick bouncing is 20 hours 13 minutes while the world record for sitting is 72 hours. Which one had a more enjoyable experience?
Knowledge is the enemy of fear
It's only a pogo stick if you operate it like one.
Who's waiting, and for what? I for one, live my life every single day without second-guessing my strategy for diversification of the market risk in metals over time. Since I trust the metals markets more than I trust any other avenue for storing my hard-earned wealth, it only makes sense to lean more heavily in that direction. Opinions may vary.
I did step out of my comfort zone a little in buying some investment property (location, location, location), and I'm already questioning the wisdom of doing that. I know that my metals will most likely always be liquid, not so much with the property.
I knew it would happen.
Oooo, do tell more! I loves me my investment properties, and am starting to consider another, after recent extensive upgrades to one of them.
Tho maybe we should move our specifics to the jmskiville thread..
Liberty: Parent of Science & Industry
The last remaining lot in the nicest development in town. Just a straightforward land-grab. Nothing serious.
I knew it would happen.
Nice snag!
Picked up places on Oregon trail and along 1st Land grant in California, loooking next at Columbus landing sites...
Liberty: Parent of Science & Industry
That's largely true. Merry Christmas!
the single most important chart for understanding the current state of the US financial system
"Asset bubbles ALWAYS burst, triggering crises. As a result of this, with each success boom and bust, the Fed is forced to engage in more and more extreme monetary policies to prop up the financial system."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Wow, it only took 50+ years?!?!? Wow, that's great. $100 worth of Bitcoin 9 years ago is worth $27million today.
Too many positive BST transactions with too many members to list.
This time it IS different (but not in a good way)
"In all, we'd say Wall Street is calling the sheep to the final slaughter."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
And tomorrow someone will turn $1 into $300 million. Be careful guitarwares.
Knowledge is the enemy of fear
the market....... is insouciant-----indulging in an eye-wide-shut orgy of recklessness that truly has no parallel, not even the mania of 1927-1929.
Wow...that's smoe good writing there. Haha
Knowledge is the enemy of fear
Now if I've got my Eyes Wide Shut at least show me something good.
Happy New Year!
Well, i have right here a 1964 dime.
As soon as this mother of all bubbles bursts, i plan to use it to buy all of the world's real estate, and stocks, as well as all of the bitcoins. Not to mention all of the booze and rib eyes. Party in Baleyville, all thanks to this one thin silver dime...
Liberty: Parent of Science & Industry
Hey Baley, you're coming up on 20k posts. Maybe you should do a giveaway of that precious dime? Allow someone else the fantasy of riches?
Knowledge is the enemy of fear
Party in Baleyville? I’m in! I’ll bring a roll of ‘64 dimes for the poker game?
I knew it would happen.
The common thread in the lead up to all US financial crisis has been easy money. Since 2008, the FED has ensured that money has never been easier. Be prepared.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
. . . and, each new financial crisis is worse than the last one and requires more drastic action.
the system remains fundamentally unreformed, banks remain too big to fail and the Fed and other central banks continue to control the flow of funds to these banks (and through to the markets) by maintaining a cheap cost of funds. Politically, no one in any position of power will do anything to fix any of this.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
https://www.atr.org/list
For all of you concerned about wage growth.
Knowledge is the enemy of fear
overdue and badly needed. Let's not forget WHY wage increases are necessary; declining strength of the currency's purchasing power. Sound monetary policy would eliminate the need for a band aid every few years.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
And wages have increased just as some of us knew they would, and have been. Remember what you got paid for your first job? Mine was $3.35/ hour doing heavy labor. Now you can stock shelves in Wall yWorld for $11/hour. And we yearn for the good old days?
Fiat currencies are designed to depreciate...that's what spurs productivity grown and investment. These are all good things.
Sound monetary policy isn't the Fed, it's your elected officials. What a stupid lot we all are....doing the same thing every 4 years hoping for a different outcome.
You want change? Then how about if no one shows up at the polls? How about if no one files a tax return? You think that would get "their" attention? Of course it would, but we're all stupid, not knowing our collective strength.
Knowledge is the enemy of fear
$1.10/hr at Burger King. I was pissed when my boss wouldn't give me a raise to $1.15/hr. (I still am.)
I knew it would happen.
unfortunately rising wages always lag behind rising prices. Wages get raised because there is a need to raise. Imagine if there were no need.
Stabilizing prices is one of the mandates imposed on the FED by congress.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
For 80% of America where the rank and file work and live wages haven't come close to keeping up with inflation. This has been going on for decades and, despite anecdotal evidence of a handful of wage increases going primarily to those who already have the highest wages/incomes, will continue as income inequality continues to expand.
Now they get $11..... or 10x more. Is inflation up 10x?
Knowledge is the enemy of fear