Inflationary Depression – Nothing But A Wishful Pipe Dream
Over the last few weeks I have heard quite a few people suggest that we are undergoing or we are about to go though an inflationary depression. Hence the rally in the stock market.
In essence, these market pundits suggests that despite poor economic conditions the stock market and other asset prices will continue to go up indefinitely. Due to fiscal stimulus, QE, zero interest rates, infrastructure spending and President Trump personally dumping pallets of hundred dollar bills from a helicopter. That's the theory.
What is Inflationary Depression?
Last time we saw a similar environment was between 1966 and 1982. During that time inflation accelerated, interest rates surged, and the stock market remained stagnant. Finishing its bear leg below 1966 top.
Here is why inflationary depression is nearly impossible today.
What do you think the FED has been trying to accomplish over the last 8 years. With zero interest rates,stimulus and massive rounds of QE.
Precisely, an inflationary environment. Unfortunately, they have been unsuccessful. Their misguided efforts went directly into creating a massive stock market bubble we see today. And what do we have to show for it? Nothing. A massive $20 Trillion pile of debt and GDP growth of 1.6% (just released).
This debt is deflationary in nature and nothing can change that. Not even President Trump.
If you would like to find out exactly what happens next based on our Timing and Mathematical work, please Click Here.