{"id":25733,"date":"2017-09-16T08:59:32","date_gmt":"2017-09-16T13:59:32","guid":{"rendered":"http:\/\/olduvai.ca\/?p=25733"},"modified":"2017-09-16T08:59:32","modified_gmt":"2017-09-16T13:59:32","slug":"the-cardinal-sin-of-investing-permanent-impairment-of-capital","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=25733","title":{"rendered":"The Cardinal Sin Of Investing: Permanent Impairment Of Capital"},"content":{"rendered":"
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Victor Moussa\/Shutterstock<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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The Cardinal Sin Of Investing: Permanent Impairment Of Capital<\/a><\/h3>\n
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How to avoid making it<\/strong><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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Last week we presented a parade of indicators<\/a> published by Grant Williams and Lance Roberts that warned of an approaching market correction as well as a coming economic recession.<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n
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The key message was:\u00a0When smart analysts independently find the same patterns in the data, it’s time to take notice.<\/em><\/p>\n

Well, many of you did, by participating in this week’s Dangerous Markets webinar<\/a>, which featured Grant and Lance.<\/p>\n

In it, both went much deeper into the structural fragility of today’s financial markets and the many reasons why economic growth will remain constrained for years to come.<\/p>\n

The excessive build-up of debt in the system — and the absolute dependence on its continued expansion to keep the economy from imploding — is, of course, seen as the prime risk to future growth.<\/p>\n

As Lance demonstrates here with several of his excellent charts, so much leverage has been taken on that its servicing is increasingly stealing capital that would otherwise go to savings, consumption and productive investment. Going forward, the demands of the debt service will simply result in less and less capital available left over to grow the economy:<\/p>\n