|US Debt at $19.9 Trillion|
The current debt is $19.9 Trillion, rounded down. (What is the other $29.4 billion between friends?) And this debt is currently growing at about $1 MM per minute. Now, some market prognosticators and web-sites say a great economic boom is about to begin. Gulp! Really?
It is true we have just been through a period of economic growth - since the Great Recession of 2007 to 2009 - but that growth is uniformly described as "tepid", or "the most sub-par in history after a recession".
From an Elliott Wave perspective, this sub-par expansion we have just enjoyed fits best in the fifth wave position, after an age of Golden Economic growth from 1932 - 2000, which is best described as being in the third wave position, with the years 2000 - 2009 being best described as being in the fourth wave position - with the marginal new high of 2007 in the major indexes, the most classic of all Primary B waves.
So, now we have a republican president elect, and a republican congress - still pending the vote recount challenges outstanding - and some will ask, "What will a fiscally responsible - yeah, right - republican congress do?" Remember, Ronald Regan and George W. Bush were supposedly of this ilk, and they did nothing but expand the debt either.
For my part, I don't think it matters. As interest rates have risen recently, the rate of increase in the debt has increased even faster & faster, and not because of spending! This is a situation of the tail wagging the dog. It would be one thing if the debt was increasing to increase spending and fiscal stimulus - but now the debt is increasing even faster, not due to increase spending, but just to account for the increasing interest rates.
This is a growing problem, not one of more and more irrelevance. And, even so, fewer and fewer Americans went to polls to express their desires. Stock market bottoms are defined by crisis and panic. Stock market tops are defined by boredom and ennui. Welcome to the latter, as evidenced by the lowest voter turnout in 20 years, according to CNNPolitics! There's a sentiment gauge for you.
So, what will the new congress do, if allowed? Will they implement a flat, fair and simple tax that you can fill out on a postcard - and cause significant unemployment in the IRS? Will they dismantle several of the regulatory branches of government - like the Department of Education in an effort to cut spending - again cutting more government jobs? Who knows. But actions of this type - if they occur - are contracting, and not expansionary in nature. Or, will they just continue the sham, and continue to talk a good game while they, too, increase the debt?
No one knows for sure. But we already have evidence - by the GDP growth of the last eight years - that even this level of debt is a 'drag' on the economy. And, increasing interest rates are causing the debt to grow faster at this time. Just imagine if we have this level of debt and contracting types of policies are enacted into law. Even with a help of a friendlier Federal Reserve - if such is appointed by President-elect trump - economic growth could waffle even worse.
If 2016 - 2017 results in being the Primary V top, of the Cycle 5 top (the fifth we noted above) of SuperCycle 3 - the great period of U.S. expansion, then SuperCycle 4 would represent a potentially unprecedented level of sideways volatility in U.S. Indexes. A SuperCycle 4th wave would be difficult to predict (it could take on one of several forms - from a triangle, a flat, etc.), and it would likely contain very "jerky" movements upward and downward which could ruin accounts - while going largely sideways in the end from a millennial perspective.
As viewers of my video channel know - fourth waves are particularly difficult to predict. I have even given a special name to this phenomenon called the fourth wave conundrum in my video entitled, A Critique of Elliott Wave for Trading. But perhaps this fourth wave - when it begins - will initially mirror the personality of the president-elect. What has Donald Trump been, if unpredictable? That is the one constant of every purported news story about him.
And, maybe, just maybe, there is more here than the work of man. Given that the planet is growing warmer and warmer so far, with the hottest years on record in many cases, and that many people deny it - even given the evidence of polar and glacial melting; given that many areas are still experiencing either unprecedented drought or cycling between that and flooding; given that world population growth is still increasing and taxing planetary resources; given that there are few restraints currently on corporate growth or corporate irresponsibility; given that the political process put into office the person who got the fewer popular votes, then maybe the resulting downturn in social mood that is occurring or will occur is nothing more than nature's way. And, maybe the candidate elected is simply a reflection of the current natural state of social mood.
And, maybe, just maybe, if we are careful and true to it, Ralph Nelson Elliott's principle of natural stock market movement will help us navigate the trying times ahead. Let's hope so.