
Big listed firms’ earnings have hit a wall of deflation and stagnation - Futurebot
http://www.economist.com/news/business/21676803-big-listed-firms-earnings-have-hit-wall-deflation-and-stagnation-age-torporation
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carsongross
Outsourcing the jobs of the same people you sell stuff to only lets you
arbitrage price stickiness for so long as the consumers eat through their
capital and expand their balance sheet.

Then, deflation.

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drawkbox
Consumer based economy that survives on spending, held back with flat wage
increases to grow spending from those same consumers. This is the result you
would expect to get.

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Gustomaximus
Monetary and fiscal policy typically seen in western economies is increasingly
geared to favor the upper end. We're essentially returning to a re-jigged form
of trickle down economic policy without the openly admitting this. History has
shown the effects this.

The optimist in me says it's cyclical and we'll adjust over the next few
political cycles in the natural ebb & flow of policy. The pessimist says the
US dollar/Fed is due a serous correction in the style of recent EU event with
some seriously negative flow on effects so I should be buying gold.

Flip a coin?

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jazzyk
The resultant (net) pattern of growth is the sum of cyclical and structural
forces. The reason why this cycle is not performing as well as before (and the
next cycle will not either) is because of serious structural problems (not
only in the US) - mountains of debt (private, government) everywhere,
financialization of many economies, very weak productivity growth, etc.

So yes, gold could have been a good idea, but the above issues have already
been priced in. And you can;t eat gold, in case of a major crisis/depression.

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Gustomaximus
Being 'priced in' assumes the market is correct. From that logic we'd never
have a crash, so not a fan of that catch phrase.

Also you pretty much cant eat ANY investment unless you buy productive
farmland. Unless going full prepper (which is more insurance than investment)
investments are about 1) wealth presentation to see you through the event, or
2) being in a position to take profit from a negative event.

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tsotha
>...finance was a crucial prop for profits in the two decades to 2007 (see
chart 3), with the banking industry expanding rapidly and industrial firms
such as GE and General Motors building huge shadow banks. The regulatory
clampdown since the financial crisis means this adventure is now over.

Is it a regulatory clampdown, or is it just that the financial sector can only
drive the rest of the economy to the extent it isn't already saturated with
debt?

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toomuchtodo
Can it not be both?

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GFK_of_xmaspast
Boy, it's almost as if the rate of profit has a tendency to fall or something.

