Economic Outlook: the Millennial Dawning
“Education is what survives when what has been learned has been forgotten,” — B.F. Skinner.
As we’ve learned, and yet have we forgotten how the United States economy is benchmarked by over-priced assets (i.e. houses, education loans, stock prices and private sales of companies). Overpriced and overvalued assets, coupled with decades old decaying real wage growth policies are the achilles heel of America’s economy.
The United States Economy is shedding the bloated weight of overpriced assets. As asset prices drop, so does the purchasing power of a dollar. That means it will cost more to purchase necessities or force the country into a depressed era because neither the rich nor poor will be able to bail the other out. Each dip in the market, asset prices are returning to the point of initial capital invested.
Mr. Market can no longer bull pass redline indicators because real wages (e.g. the amount of cash someone can pay) does not support the required returns for an investor to make an allocation; henceforth, as Mr. Market bears down for hibernation, we should design new business models and policies that support real wage growth, which would allow us to build for the next generation.
