The stock market continues to show volatile signs of a market bubble. Here’s five charts that show that a very real bubble is on the horizon.
1. Economic Bubbles and The Breadwinner Economy
Former Congressman and Reagan’s budget director, David Stockmanhighlights that, “Another month has passed in which the number of Breadwinner jobs remain below where it was when Bill Clinton was in the White House. Since then two presidents have come and gone, and now possibly a third. Yet there are still 300,000 fewer jobs in the productive center of the U.S. economy than there were in early 2001.”
Stockman levels, “This suggests something isn’t right, and that point is further driven home by the pancaking of the industrial economy over the last decade. Specifically, industrial production in June was still lower than at the pre-crisis peak”
What all of this equates to is a crisis of economic stagnation. It bolsters national debt and puts forward a threat to fiscal governance. Stockman summarizes that, “You can’t justify a healthy economy purely on the claim that jobs grew by 209,000 in July or that GDP is up at a minimal 1.9% rate in the first half of the year.”
2. Of Market Bubbles and Bank Loans
Financial market analyst, Lee Adler highlighted in mid-June that we have entered a period of calm before the storm. He argues that the storm is due to begin when the Federal Reserve starts to shrink its massive balance sheet.
Adler writes, “Some of the increase in debt that had driven the economy and the asset bubbles has bled off. With the Fed announcing that it will reduce its balance sheet, that’s likely to deter speculative borrowing even more.”
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