John Mauldin has put together a few interesting pieces over the weekend. Some of the select quotes from Thoughts from the frontline:
Money Velocity (which CM wrote about in 2016):
“velocity of money, which is continuing to fall, as it has for almost 20 years…So it is somewhat disturbing to see velocity now at its lowest point since 1949, and at levels associated with the Great Depression.”
“Note that it is the 95th percentile of workers that has received the bulk of the increase in wages. The bottom 50% is either down or basically flat since 1979. Even the 70th percentile didn’t do all that well.”
“Over the last half-century, higher deficits have been associated with recessions. After recessions end, the deficit shrinks, and occasionally we get a surplus. That’s not happening this time. Deficits are growing even without a recession…but in the next recession tax revenues will fall, and spending will increase enough to not only swell the annual deficit but also to add north of $2 trillion to the national debt each year. We’re using up our breathing room, and that will be a problem – sooner or later.”
“Ominously, you can see from Grant’s labels (In the above chart) with arrows that peak yields tended to correspond with crises. If the current breakout persists, it is probably going to get its own label, and I bet we won’t like it.”
Nothing to see here?