Economy

There has been nothing that has been normal about this economic recovery, and I don’t think there’s going to be anything that’s normal on how this all ends. For now, enjoy the melt-up, because this too will come to an end.

It is only a matter of time before the dollar will lose its status as reserve currency. Before this happens, the dollar will start crumbling and eventually disappear into a black hole resulting in an implosion of all the dollar assets and debts.

Today everything must be dumbed down to the lowest common denominator of readers or viewers... Any news must be superficial and short. Most content must have an entertainment or gossip value. All serious matters are either left out or covered very briefly. We are now in the age of instant gratification. Viewers’ interest can only be kept by short superficial language, lots of big images and constant change of focus. No one is really interested in the truth but, nevertheless, here it is!

The media is full of stories claiming that lower tax rates will cause a huge and damaging increase in the federal deficit and will fail to stimulate the economy. Here are 10 charts which show that those claims are not backed by historical experience.

Is the market overly complacent? Overly optimistic? Absurdly cheap or expensive? A great buy on dips? "No" is the best answer to all these questions, in my view. Now is not a time to take on oversized risks, but neither is it a time to cash in all your chips. Let me explain with the help of the 12 charts below.

Take note: what's going on today in the economy and in the markets is not unprecedented or extraordinary. Below are 6 charts to support said contention:

While everyone continues to focus on stocks, a much larger, far more important situation is brewing in the single most important asset class in the world. That situation involves the USD and the US Dollar Index.

Have Americans been living above their means these past 37 years (since 1980)? I think so. We have borrowed and borrowed (and borrowed) to maintain our prosperity and our exceptional lifestyle. Much of this at the expense of the world’s citizens who provided us the goods. America has 4.4% of the world’s population yet we consume some 23.6% of Global production. How can this happen? Why this favoritism?

America’s national philosophy has become relying on debt to pay today’s expenses. Nothing’s easier than borrowing money, especially at super-low interest rates but believing that debt has no consequence, that the status quo is permanent, that all the promises based on soaring debt can be paid—it’s all an appealing fantasy. Believe at your own risk.

If you’re from Canada and the U.S., chances are you’ll never see market capitulation. However, you’ll likely see many corrections, and maybe even a couple of crashes. Here are the definitions of the meanings of the words: correction. crash and capitulation.