When you start talking about resetting the educational and social contracts and working conditions, you are talking a radical social agenda. Here is a chart my staff created in late 2016 using Congressional Budget Office data, showing what will happen in the next recession if revenues drop by the same percentage as they did in the last recession (without even counting likely higher expenditures this time). They are proposing programs to alleviate that frustration—expensive, society-altering programs. Individuals in some countries did in fact reduce their debts, but not governments and corporations, or most individuals outside the US. Interest on the national debt is the third largest component of our annual Federal budget – after social programs and military spending. And for good reason. This letter and next week’s will be two of the most important I’ve ever written. President of Mauldin Economics. This wildly popular newsletter by celebrated economic commentator, John Mauldin, is a must-read for informed investors who want to go beyond the mainstream media hype and find out about the trends and traps to watch out for. Totally focused on scoring, he doesn’t know if the outfielder is throwing a ball that will reach home plate first. Join hundreds of thousands of fans worldwide, as John uncovers macroeconomic truths in Thoughts from the Frontline A time is coming when the market and voters will realize that these obligations cannot be met. The present course is unsustainable. WEF says we must rebuild economies, restructure capitalism and commit to sustainability and addressing climate change. The Great Reset is simply my term for climactic events that resolve our global debt overload while at the same time dealing with slow economic growth, high unemployment, and social unrest. We need some realistic way to decide how to meet those promises, or at least the portion of them that can be met. Social security, medicare, will be paid fifty cents on the dollar. It could happen many different ways, some better than others. Income and wealth inequality are very real. I expect that we will be coming back to this interview again. This time is different, truly, because never before has this happened in a world of fiat currencies. Continue Reading / Mauldin Economics… I hope you find the letters helpful. It could happen many different ways, some better than others. Editorials | Mauldin Economics September 2, 2020. I began searching for the best of them some three years ago. Why 50 years? There are almost 2000 ETFs in the US alone, and according to ETFGI there are 4,874 ETFs globally, with assets skyrocketing from $807 billion in 2007 to $4 trillion today. Analyst John Mauldin shares his opinions in the crippling US debt. Now, in the spirit of “never let a good crisis go to waste,” the WEF sees the coronavirus pandemic as an opportunity to reset capitalism. CMG Mauldin Smart Core Q1 2020 Quarterly Call. Now, people have been saying that for years. You pay fifty per cent, government pays fifty per cent. I appear regularly on CNBC and Bloomberg TV. The chart illustrates how the debt is split among household, corporate, government, and financial sectors: The debt-to-GDP ratio increased in all advanced economies from 2007 through 2014, and the trend is continuing. The Great Reset: The Collapse of the Biggest Bubble in History. This pandemic and recession may push us there faster because they are making the debt grow faster. Terrifying? That is at least 50% more than their total GDP. For the record, what I mean by government promises are pensions and healthcare benefits in all their myriad varieties. We are talking about debt and unfunded promises to the tune of multiple hundreds of trillions of dollars – vastly larger than global GDP. The Great Reset, Part Two | Thoughts from the Frontline Investment Newsletter | Mauldin Economics use a variation of Modern Portfolio Theory. Yes. Debt has additional consequences. Founder Klaus Schwab says it quite openly. We are coming to a period I call “the Great Reset. Further, the way we determine relative value within an asset class (especially equities) is being short-circuited in a way that could seriously impair traditional active asset management. And there will be more buildup of debt and more political and economic chaos. They all experienced turning points during the 1970s. But I firmly believe we will see some kind of resolution. The BOJ has well over 140% of Japanese GDP on its balance sheet. That the world is awash in debt is not exactly news. The Great Reset vs. And that’s without adding to the debt itself every year, by running budget deficits. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. This letter will cover the philosophical underpinnings of my thinking. They will suffer this fate because they believe the future will play out like the past. At some point rising insecurity becomes expensive. Dallas, Texas 75219, Toll-free: (877) 631-6311 A Citibank report shows that the OECD countries face $78 trillion in unfunded pension liabilities. Wednesday , January 20 2021. Remember Ross Perot and his charts in the early 1990s? And, of course, they are not long on specifics. The Great Reset. MAULDIN: Brace Yourself For “The Great Reset” Jun. Others have used it for their own purposes. to make it possible to now approach our portfolios in a systematic way that allows us to counter negative trends. These obligations simply cannot be paid. They are the result of my years of actually working with clients and money managers and thinking about the economic and particularly the macroeconomic world. Some really small, niche-market ETFs have attracted significant capital. (JavaScript must be enabled to view this email address), https://www.mauldineconomics.com/frontlinethoughts/the-great-reset-how-should-we-then-invest/. You can begin to see the scope of the problem. Municipal Court. Commentary. Mauldin Economics strives to bring to the attention of subscribers specific investments that John Mauldin's team uncover to meet today's investment goals. More likely, this is another example of wealthy, powerful elites salving their consciences with faux efforts to help the masses, and in the process make themselves even wealthier and more powerful. Global debt-to-GDP is now 325%, though it varies sharply by region and country. And you know you want to see what I’m doing with Mauldin Solutions. It could happen many different ways, some better than others. Experience the legend—join one of the most widely read macroeconomic newsletters in the world. by John Mauldin of Mauldin Economics, 1/8/21. Historically, such developments have served as leading indicators of looming political instability. As we have discussed many times, debt is a limiting factor on future growth. We’re on a slope where monetary policy has become increasingly ineffective in promoting real economic growth. All these cycles look set to peak in the years around 2020. For just a brief time, you’ll get to peek at top analysis and specific recommendations, with no obligation at all. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.” It got a lot worse. Now I will tell you how I intend to diversify trading strategies and give you a link to the actual strategies and managers I will be using. There is good reason to worry: a sharp economic downturn has already begun, and we could be facing the worst depression since the 1930s. The is the sharpest move into deflation terrain since March 2011. John Mauldinâ s popular macroeconomic musings, read by millions around the world, provide you with a perceptive and personal big-picture view of the economy and financial sector. Saturday, November 21, 2020 12:54 PM EST. The Government Will Resort to Measures that Sound Insane Today. Steve Cucchiaro and John Mauldin provide an excellent update on the strategy and the current macroeconomic environment. Global GDP is roughly $80 trillion. Let the master guide you through this new decade of living dangerously, PO Box 192495, All while new technology (especially biotechnology) makes our lives better. The alternatives may be even worse. … my point is: Central banks create the instabilities, then they have to save the system during the crisis, and by that they create even more instabilities. Light in the COVID Tunnel. But since interest rates were never raised as much in upturns as they were lowered in downturns, the capacity to deliver that punch was decreasing. Business on the Frontline “Premature optimization is the root of all evil…” – Donald Knuth, from his 1974 Turing Award lecture. Of course, higher interest rates affect more than just government interest rates. Last month I posted an article that looked at the World Economic Forum as the institution behind ‘The Great Reset‘ agenda that was launched in June. It will be a strange new world that will have no resemblance to the last decade’s “normal.”, We will stumble through and some of us will do extraordinarily well, because we position ourselves to take advantage of this cycle. Talked philosophy rather than action our global economy diversifying among noncorrelated trading.... Instance in history rapidly approaching when those “ future politicians ” are the talking on... 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