Fonte: Is It 1999? 2007? Or Both? - ZerohedgeIn 1999:
- Fed was hiking rates as worries about inflationary pressures were present.
- Economic growth was improving
- Interest and inflation rates were rising
- Earnings were rising through the use of “new metrics,” share buybacks and an M&A spree. (Who can forget the market greats of Enron, Worldcom & Global Crossing)
- Margin-debt / leverage was at the highest level on record.
- Stock market was beginning to go parabolic as exuberance exploded in a “can’t lose market.”
- Speculative asset of choice: Dot.com stocks
In 2007:
- Fed was hiking rates as worries about inflationary pressures were present.
- Economic growth was improving
- Interest and inflation rates were rising
- Debt and leverage provided a massive “buying” binge in real estate creating a “wealth effect” for consumers and high-valuations were justified because of the “Goldilocks economy.”
- Margin-debt / leverage was at the highest level on record.
- Stock market was beginning to go parabolic as exuberance exploded in a “can’t lose market.”
- Speculative asset of choice: Real Estate
In 2017:
- Fed was hiking rates as worries about inflationary pressures were present.
- Economic growth is improving because of 3-hurricanes and 2-wild fires.
- Interest and inflation rates are expected to rise
- Earnings were rising through the use of “new metrics,” share buybacks and an M&A spree.
- Margin-debt / leverage is at the highest level on record.
- Stock market was beginning to go parabolic as exuberance exploded in a “can’t lose market.”
- Speculative asset of choice: Bitcoin
This coincidence must alert readers that a tempest is brewing on subjects noted: lurking inflation, increasing debt, suppressed interest rates and the shifting of hegemonic power. There are only two important questions in investing that also apply to subjects impacting the future stability of the world — tell me why and tell me when. Plender gives us the “why”, the ever-increasing “intolerable burden” of government debt and suppressed rates leveraging the global financial system. He gives us the tipping point. What we await is “the when”, as in when do we know we have “tipped”. Paul Hackett Madison, NJ, US Letter: Why the geopolitics of international currency choice matters
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