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Skulderna i världen har aldrig varit så höga som de är idag samtidigt som man trycker pengar för att hålla systemet igång. Guld och silver har varit en del av det monetära systemet under flera tusen år. De senaste dryga 40 åren har man dock valt att lämna dessa ädelmetaller utanför och det har medfört ökade skulder och ett ohållbart system.

Det gör ont när bubblor spricker

Publicerad 2018-09-10 17:00:32 i Ekonomi,

The recent borrowing boom caused total outstanding U.S. corporate debt to rise to over 45% of GDP, which is even worse than the level reached during the past several credit cycles.
Corporate Debt vs. GDP
 

U.S. corporations have been using much of their borrowed capital to buy back their own stock, increase dividends, and fund mergers and acquisitions - activities that are known for boosting stock prices and executive bonuses. Unfortunately, U.S. corporations have been focusing on these activities that reward shareholders in the short-term, while neglecting longer-term business investments - hubristic behavior that is typical during a bubble. The chart below shows how share buybacks and dividends paid increased dramatically since 2009:

Stock Buybacks

During the dot-com bubble and housing bubble stock market cycles, margin debt peaked at roughly 2.75% of GDP. In the current stock market bubble, however, margin debt is nearly at 3% of GDP, which is quite concerning. The heavy use of margin at the end of a long bull market exacerbates the eventual downturn because traders are forced to sell their shares to avoid or satisfy margin calls.

 SP500 vs. Margin Debt As % of GDP
Warren Buffett’s "favorite indicator" - the U.S. stock market capitalization-to-GDP ratio (the total value of the U.S. stock market divided by the GDP) - also confirms that the stock market is overvalued relative to the actual economy and is at an even more extreme level than it was during the dot-com bubble. Buffett claimed that this indicator is “probably the best single measure of where valuations stand at any given moment."
Market Cap-to-GDP Ratio

The Fed Funds Rate chart below shows how the last two recessions and bubble bursts occurred after rate hike cycles; a repeat performance is likely once rates are hiked high enough. Because of the record debt burden in the U.S., interest rates do not have to rise nearly as high as in prior cycles to cause a recession or financial crisis this time around. In addition to raising interest rates, the Fed is now conducting its quantitative tightening (QT) policy that shrinks its balance sheet by $40 billion per month, which will eventually contribute to the popping of the stock market bubble.

Fed Funds Rate
 
 
 
 

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Roger Lundberg

Har varit verksam inom den finansiella marknaden i över 35 år. Har därmed varit med om både upp och nedgångar inom olika marknader. Min bedömning är att vi närmar oss en ny härdsmälta på de ekonomiska marknaderna och vill därför med denna blogg dela med mig av min erfarenhet.

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