Today 2:26 pm
LowIQTrash » 23 minutes ago » wrote: ↑ Ray Dalio believes we are at the cusp of a 100 yr long debt cycle. Short term debt cycles cause less severe recessions like the ones in 1963 and 1990.
The debt piled into the system has gone exponential over the last 40+ yrs, and when the credit stops people (esp those close to or even in retirement) will have no choice but to sell their assets, esp paper assets as those are more volatile than “tangible assets” such as real estate.
This will cause a cascade of investors rushing for the exits. Generational wealth can be made during stock market crashes.
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There is also a non-trivial probability China will attempt to annex Taiwan before the end of 2027, according to the Pentagon’s own reports. Were such a scenario to play out, trade between China and the US would collapse, which would trigger another freefall in stock prices.
(Limit down days like -10%, -15% would not surprise me. We could go from 4000 SPX to 3500 SPX in one or two days).
Thanks for the homework! I'll have to read up on that a bit.