GoldbergFinancial wrote:Nothing is getting better, don't believe it, build up cash positions and be safe. You can buy assets again once we crash again.
That's what I like to see - pessimism. It's a great sign that it might be time to start buying again.
Kidding aside, I am not too worried. I think we are currently in the next "great depression." Many of the same factors are at work - crushing of stock euphoria (1929/2008), poor consumer demand driven, dissillusionment and retreat from globalism, drags from external factors (drought in the 1930s, security costs and debt now). But after studying and modeling it for several decades, brilliant economists like Bernanke know that flooding the system with money can keep it from getting too bad until conditions improve again. (Remember they called him Helicopter Ben.) That's exactly what they have been doing - creating a monetary flood to fill in the gaps left by everything else dropping. Can they continue that forever? Well, actually, maybe in theory but not credibly. But they shouldn't need to. We are about 5 years into whatever this is and we are beginning to climb out. We're at about 1934 or 1935...and things got better from there.
While few agree on the causes of the GD, the solution was the New Deal and government spending - a fiscal approach. This time, for arguable reasons, a monetary approach is being used and it seems to be working just as well. My biggest worry is not a crash but rather a long period, perhaps 5-10 more years, of very slow recovery because a monetary approach must ultimately be withdrawn and that will put a drag on everything. During that time I think unemployment will stay elevated but I think investment returns can do alright as companies restructure to adjust to lower demand.
But after the GD we also had WWII to give us a kickstart. I hope no one hopes for a repeat of that kind of world crisis.