James Dale Davidson (Sovereign Individual, but also "Brazil is the New America", so take it fwiw) predicts why & how the US economy will collapse (2016):
A summary:
1/ Stock market collapse
2/ Home Equity slaughter
3/ $46M wealth transfer
4/ dwindling velocity of $
& more
A summary:
1/ Stock market collapse
2/ Home Equity slaughter
3/ $46M wealth transfer
4/ dwindling velocity of $
& more
Why will stock market crash?
Margin Debt = amount of $ being borrowed to invest
a/ margin levels rising, S&P staying the same. People gambling w/ debt.
b/ Stock market participation rate - astonishing low levels relative to stock pricing. People aren't investing.
Margin Debt = amount of $ being borrowed to invest
a/ margin levels rising, S&P staying the same. People gambling w/ debt.
b/ Stock market participation rate - astonishing low levels relative to stock pricing. People aren't investing.
How could stock market go up if participation rate is low and margin debt is high?
Stock buy backs. Financial engineering. Borrowing $ at low interest rates to buy their stock back.
Like you getting home equity line in your house to buy your house at a higher price.
Stock buy backs. Financial engineering. Borrowing $ at low interest rates to buy their stock back.
Like you getting home equity line in your house to buy your house at a higher price.
P.E. ratio is 27. Usually it's 16.
Fewer people trading, using more margin, and PE ratios way too high.
Fewer people trading, using more margin, and PE ratios way too high.
Equity in many homes will get wiped out.
From 2012, prices up 40% per home, but home ownership rate is lowest in its 50 yrs
How can real estate prices going up when % of Americans owning homes is at 50 year low?
From 2012, prices up 40% per home, but home ownership rate is lowest in its 50 yrs
How can real estate prices going up when % of Americans owning homes is at 50 year low?
After crisis, Wall Street bought properties at steep discounts….but prices can’t go higher than homebuyers can afford. As such, prices will go down….especially when mortgages come back to normal rate of 6-8%
77% of net worth in America goes to baby boomers — they will retire.
So instead of earning money, saving, or investing, they start spending
10,000 baby boomers retire every day -- results in a transfer of 46 trillion dollars
So instead of earning money, saving, or investing, they start spending
10,000 baby boomers retire every day -- results in a transfer of 46 trillion dollars
Dwindling velocity of money.
Ratio of nominal GDP / money supply. Or how fast money moves.
Money just isn’t moving. If money isn’t moving, there's less tax money.
It's an economic traffic jam.
Ratio of nominal GDP / money supply. Or how fast money moves.
Money just isn’t moving. If money isn’t moving, there's less tax money.
It's an economic traffic jam.
Other economic cracks:
- US dollar has been rising short term, but in a long-term downward trend
- Unemployment rate nominally is ~5.5%, but real unemployment 4x higher.
- Erosion of middle class
- Student loan bubble - cost gone up 10x faster than price of new car since 1978
- US dollar has been rising short term, but in a long-term downward trend
- Unemployment rate nominally is ~5.5%, but real unemployment 4x higher.
- Erosion of middle class
- Student loan bubble - cost gone up 10x faster than price of new car since 1978
Would love to hear where this is way off.
