3 parts of the US Economy
Capital Goods: cars, construction, major industrial equipment.
Discretionary Spending: fine dining, entertainment, travel, high fashion, jewelry, art.
Necessities: food, shelter, clothing, energy, health care
A bubble occurs simply when the price of something rises far higher than what the thing is really worth.-Man v. Markets by Hirsch.
Asset growth that is not firmly pinned to some underlying real economic driver is not sustainable.-Aftershock Economy by Wiedower.
Beginning with our decision in the early 1980s to run large government deficits, six co-lined bubbles have been growing bigger, each working to lift the others, all booming and supporting the US Economy:-Aftershock Economy by Wiedower.
Real Estate: Income between 2001-2006 grew 2% while home prices grew 80%.
Stock Market: The Dow rose 300% from 1928-1982 (54 years). Yet in the next 20 years the Dow increased an astonishing 1200%, growing 4x as fast as before, but without 4x the growth in company earnings or our GDP.
The Dow Rose 14 fold from 1982 to 2007, while company earnings rose only three fold for the same period. Earnings rise about as fast as GDP.
Dollar: Our dollars rose in value because of rising demand for dollars to make investments in our bubbles. Now the falling bubbles will eventually create falling-value dollars.
Inflation has averaged around 4.2 percent over the last seventy years.-Complete Guide to Money by Ramsey.