Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
The Single Reason This "Recovery" Isn't Like Any Other
[COLOR=#0000ff]ongoing need of households to deleverageIf you've been reading for awhile, we've been very bullish on the whole idea of the ongoing "balance sheet recession" characterized by the .
To put it another way: Households are saddled with so much debt from the boom, that even with all the wrenching pain of the bust, they still have a lot of debt to cut.
For proof that this is the deciding factor behind the boom, consider this chart from the [COLOR=#0000ff]Council on Foreign Relations (.pdf)[/COLOR].
In past recessions, debt intake never bothered to slowdown. Even in the worst ones, leveraging up continued.
Now? flat. And perhaps worrisome is that it hasn't gone down more, since that just means the pain drags out longer.
Debt grows exponentially, while the real economy only grows linearly. In a debt-based monetary system such as the one we have (which should properly be called Creditism not Capitalism), where every dollar in circulation came about as the result of the creation of debt, at some point, there is simply no more ability for the real economy to take on any more debt usefully. This point was probably reached some years ago. Then, at some further point, we reach a place where the real economy cannot take on any more debt at all, useful or not. We may have now reached this point.
