Structural or Cyclical, David Brooks has it half right
Our economic situation, our meaning the world, as we all have a problem, is the hot debate topic in the political arena these days. David Brooks of the NYT has over time written a lot of good analyses of various topics. In an article this week he discusses whether the current problems in the US are Structural or Cyclical and comes down on the side of Structural. In my opinion he has it half right. See it here.
I believe that we are in a Cyclical Structural problem, meaning that there are cycles to structural evolvement of an economy. We all know why cycles exist, people don’t pay attention to history and do the same thing over and over. The big 72 year cycle, which I believe has merit, hit its peak in 2000 and the solutions since have not created a solid footing. Part of the problem is that the Fed has been too involved and used excess liquidity to create various bubbles. Brooks is right, there are structural problems and they do need to be solved, but in my opinion that has to happen by the administration and congress working together with a common purpose. That is not happening and I don’t think it will until we hit bottom and the people of this country take back their country, until the 99 % rule, we will continue to implode.
As to the markets today, we covered a lot of our shorts in stocks and gold yesterday as I don’t think sell in May and go away will work two years in a row, Sell in June is another story.