According to Shilling, the U.S. has gone through a number of leveraging and deleveraging cycles, with the latter taking about ten years to complete. Right now, he says, we have about four more years of slow growth before economic activity gets back to normal.
The authors claim the current financial bubble is even bigger than the one in 2007. I agree. But how does it end?
Confronted with the possibility that the endgame of the present experiment in extreme monetary accommodation may be higher inflation and even currency disaster, many private investors and portfolio managers respond that they should be okay, since their wealth is protected through allocations to equities and real estate.
Only Four Years Left on the Ten-Year Deleveraging Cycle
Jim is pleased to welcome back A. Gary Shilling PhD, President of A. Gary Shilling & Co., an economic consulting firm and a registered investment advisor. Gary and Jim cover an array of topics, including manufacturing, banking, education, housing, technology, debt and inflation.
After posting another new high last week, stocks were taking a breather during Monday’s session. The primary catalyst came out of China.
There is a fairly regular pattern to how the market behaves during what is called the "four-year election cycle." Currently, the pattern suggests a market peak in April, followed by a bottom in late August, before a strong year-end rally.