November 22, 2016
Economist’s view: How Long Can This Go On?
Economist’s view: How Long Can This Go On? November 21, 2016 | by Dr. Peter Linneman | Commercial Property Executive We continue to monitor the U.S. economic cycle, using both a …

Read more

Economist’s view: How Long Can This Go On?

November 21, 2016 | by Dr. Peter Linneman | Commercial Property Executive

We continue to monitor the U.S. economic cycle, using both a wide variety of economic statistics as well as what we’ll call qualitative “canaries.” Taken as a whole, these analyses suggest we are in the bottom of the sixth inning, with no recession expected until 2019. However, as in baseball, the remaining innings will not all be pure successes. There will be setbacks, but we expect that more good is ahead than bad.

Based on the capital markets, we are in the ninth inning. After all, how much better can it get than when money is practically given away for free (and in some countries, borrowers are paid to borrow)? So while the economy as measured by GDP and employment will continue to grow through 2018, the capital markets will start to tighten. This will further improve the economy by reducing capital market distortions.

Why do we believe a recession will occur in 2019? In the simplest terms, it is because prolonged growth breeds excess, and excess sows the seeds for a recession. Right now, the only identifiable excess (though it’s a whopper) is the bubble pricing of government debt. Oddly, though, this excess has reduced—not increased—economic growth.

By artificially setting interest rates on short-term government debt near zero, and distorting long-term interest rates through huge quantitative easing purchases, central banks around the world have made debt far too cheap for governments. This has squeezed out private investment while bestowing supposedly free money on the government to spend. As a result, capital has been diverted from relatively productive private investment into unproductive government transfer payments (which comprise 75 percent of federal spending).

Read Full Article Located Here

Recent

4 Tips To Improve Your Banner Ads

4 Tips To Improve Your Banner Ads

The first step to improving your banner ads is to craft a compelling advertisement. Too often, alternative investment firms simply feature their logo and tagline, expecting viewers to click through.

Most Popular

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 10-3-2023 Blue Vault wishes to acknowledge and apologize for the delay in publishing some Q2 2023 NTR Individual Performance Pages (IPPs) as well as the full review. We recently added additional reporting metrics to our IPPs, and that, combined with coverage of all share classes and some additional…
Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 9-25-2023 Blue Vault has published the Q2 2023 Nontraded BDC Industry Review as well as Individual Performance Report and Limited Operations pages for the following offerings (newly published pages in bold font): Nontraded REITS American Healthcare REIT Q2 2023 Apollo Realty Income Solutions Q2 2023 (limited operations) Ares…

Explore

Blue Vault Logo
Don’t miss alts news
and educational events

Subscribe Now