Monday, March 20, 2017

There will come a day of reckoning; it’s not a matter of 'if' but 'when' - By Jeff Greenblatt

We are talking about numbers like $20 trillion. But here’s something that should concern all of us. Larry Kotlikoff is an economic expert who really understands the liabilities that have been left off the books by both sides of the aisle through the years. He says the real fiscal position of the government is a debt of approximately $220 trillion.

Put that name in the search engine and you’ll find enough to keep you busy. There wasn’t much said about the debt ceiling this week. It could be the position of the VIX and all the euphoria but people don’t seem to be nearly as concerned as they were in 2011. If they were they might take the immigration issues more seriously. I’ve researched this guy and he’s very concerned about the benefits bestowed on legal immigrants. I’m not going to engage you in a political discussion but if you consider the fiscal position of the country and you are awake you’d likely realize both sides of the aisle spend money like drunken sailors. There will come a day of reckoning; it’s not a matter of 'if' but 'when.'

Long time readers of this column will remember my predictions for 2014 based on the 1914 analogy for WWI. There was a panic in 1907 and a World War 7 years later. This time ISIS exploded on the scene in 2014, setting up the migration crisis in Europe in 2015. It likely changed the face of Europe forever. Why am I telling you this? If I draw a parallel to the 20th century, the debt bubble should explode no later than 2029, the 100th anniversary of the big stock market crash. At the rate we are going, we’d be lucky to make it that long. Nobody really knows when it could explode and now you know why I rarely discuss this topic. It's only 12 years away. That takes care of last week. Now we are confronted with the change of season and the Gann master turning point for the year. If the stock market is going to correct, it will never be set up more perfectly than it is right now.