Wednesday , July 26 2017
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The Virtuous Cycle – Video

Summary:
At the beginning of this year, I wrote an article entitled the “Death Of The Virtuous Cycle,” wherein discussed the reasons why, despite many promises, there has been no sustainable economic recovery. The United States, and the developed world for that matter, have made repetitive attempts over the last 16 years to return economic growth to the pace of years long past. These nations are stuck in a cycle in which hopes for economic “escape velocity” get crushed by economic recession and asset price collapse. Following each failure is an increasingly anemic pattern of economic growth accompanied by rising mountains of debt, which ultimately lead to another failure. The perpetual excuse from the central bankers is that not enough was done to foster “lift-off”. In their view, lower interest

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The Virtuous Cycle – Video

At the beginning of this year, I wrote an article entitled the “Death Of The Virtuous Cycle,” wherein discussed the reasons why, despite many promises, there has been no sustainable economic recovery. The United States, and the developed world for that matter, have made repetitive attempts over the last 16 years to return economic growth to the pace of years long past. These nations are stuck in a cycle in which hopes for economic “escape velocity” get crushed by economic recession and asset price collapse. Following each failure is an increasingly anemic pattern of economic growth accompanied by rising mountains of debt, which ultimately lead to another failure. The perpetual excuse from the central bankers is that not enough was done to foster “lift-off”. In their view, lower interest rates, more fiscal spending and additional quantitative easing will eventually provide the needed spark that will cause the economic engine to fire on all cylinders. In the profound words of Mark Twain:

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

The following video discusses the premise of why current economic policy is not simply flawed in its logic and application but actually destructive.

As I concluded previously:

Unfortunately, ignoring or not understanding the facts does not change them, and if repairable at this late stage, fixing the problem will be very painful. At the same time, and even more importantly, repairing America’s economic foundation first requires proper diagnosis and understanding of the cause as has been presented here.”

Michael Lebowitz
Co-Founder 720 Global. Strategic Expertise: Macro-Econ, Asset Alloc, Valuation, Risk Mgt.

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