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Click to enlarge.
I may want to start firing up the Rubicon machine again. Sigh.
Update:
Click to enlarge.
I should probably mention that the "You Are Here" point was April 2012. We've slid a bit to the left since then.
Source Data:
St. Louis Fed: Custom Chart
8 comments:
Nifty correlation. I bet there's an algo for that!
Fascinating charts!
Mr Slippery,
I would bet that you are right. I would also bet the following.
1. Much processing power is out there automatically and continually looking for (and finding) similar correlations.
2. That processing power is locked away behind closed doors and is not available as part of "advanced" trading tools intended for the average trader.
Just a hunch. ;)
mab,
Fascinating, indeed.
Right out of hell, I saw it! - Commodore Decker, The Doomsday Machine (Star Trek)
It looks like this chart shows that the SP500 is still heavily mfg based.
Scott,
At the very least, it seems unlikely that we will prosper by converting to a 100% service economy and running massive trade deficits.
I say that somewhat tongue-in-cheek of course. Sigh.
"We now live in a world where deflation has become public enemy number one. In this current economic environment, governments seek a condition of perpetual inflation in order to maintain the illusion of prosperity in the developed world. But in reality, deflation is the free-market approach to rectify a secular period of superfluous money supply growth, debt accumulation and asset price appreciation."
"The plain truth is that the current debt levels, carried by the developed world, demand a period of massive deleveraging to occur. A healthy and cathartic period of deflation is needed; where asset prices fall, money supply shrinks and debt levels are reduced to a level that can be supported by the free market. This is the only viable answer for various nations struggling with solvency.
However, the return journey from rampant inflation and asset bubbles always carries insolvency and defaults along for the ride. Defaulting on debt is deflationary in nature and restructuring your liabilities is the only choice when you owe more money than you can pay back.
The prevalent idea among heads of state and central banks is that a country can borrow and print more money in order to eliminate the problems caused by too much debt and inflation. But more inflation can never be the cure for rising prices and piling on more debt can't solve a condition of insolvency. "
http://www.huffingtonpost.com/michael-pento/deflation-isnt-the-enemy_b_1542278.html
Anonymous,
In this current economic environment, governments seek a condition of perpetual inflation in order to maintain the illusion of prosperity in the developed world.
Crazy talk! ;)
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