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« Yves Calls a Bond Panic | Main | Interest Rate Hike - Will They or Won’t They? »

Wednesday, February 18, 2015


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This is where my thinking has been lately as well.

The US economy has been "trying" to enter the Kondratieff winter phase since 1987, but has been prevented by interventionist easy-money policies. Nature will eventually take its course, but I think we could see a final, record-setting bubble beforehand. The strength of equities in the face of the deflation of the oil/commodity complex tells me we may see some very hot money entering the stock market before all is said and done.

As hard as the media and government have tried to pump the recovery story, the "shadow" of 08/09 still hasn't really passed. This suggests there is still plenty of room left for mania. The euphoria could get quite intense once the oppressive "doubt" in the air for the last 6+ years finally starts to clear.

Manav Aggarwal

I agree Yelnick - global equities dont seem slowing down anywhere though RP has been crying wolf for what 2 decades now - I have learnt so much about markets reading this thoughts but I feel he has had his credibility shot to pieces with his doom prophecy. He may still be right who knows but it not have been terribly useful for an investor in the interim.


RP occasionally comments on now near the end the flight to quality will cause a spike in US assets including equities. He should stay with that!

On the Long Wave, it is more descriptive than prescriptive, and I think pundits trying to create cyclical precise timing for it are missing the forest for the trees. The Dot-Com Bubble of 1995-2000 followed by the Housing Bubble from 2003-2008 and now the current 2014-2017 (?) will look a lot more like the Auto Bubble from 1914-1919, followed by the Roaring '20s from 1924-29 and the reflation bubble from 1934-37 than any comparisons to 1987. The Long Wave hit with a vengeance after the 1929-32 fall and didn't flip over to Spring until 1949. This time it appears to have hit us after 2007-2010, as the Housing Bubble postponed things after 2000-2003. The attempts to reflate this time around are not working out. After the next financial crisis, deflation will be hard to prevent as the massive debt overhang gets written down. In some scenarios the bouts of deflation plague us past 2032.

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