GMO Investing Forecast.

[Michael74]

Based on valuation, GMO estimates a negative 5.6% return on the S&P. 7 year time frame. US cash and emerging markets stock/debt are their only positive categories. That is, GMO expects stocks to lag the bank's terrible inflation over the next 7 years or so.

The stock market is in a mania. Historically, manias are associated with sub par future return. John Hussman estimates that a 2/3 bear market in stocks would be needed to return stocks to historical post bear market norms.

Studies suggest that the majority doesn't outperform an inexpensive balanced index fund. Therefore the majority is likely to lag the bank's terrible inflation. Most corporate pension funds are already toast. Additional public and corporate pension funds are likely to be toast over the next decades. Victims of bankers' wanton credit creation. Bankers are oppressing their elders with inflation. Especially out of control service inflation, which is not properly accounted for by the CPI. Stocks are not likely to help much going forward due to the mania.

Hopefully, voters will vote away inflation.

 

[Michael74]

Here is a PDF study by the BIS proving that deflation is far superior to inflation.

Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive.

That is, the majority benefit when prices at the store become better. People can buy additional goods with their paychecks and salaries. Since people buy additional goods, workers jobs are more secure. Shoppers improve their situation because now they have better stuff at home. The majority win when honest money is in the land.

 

[Creative]

inflation is coming because dems in California are giving their base $15 an hour for flipping cheese burgers at McDonalds (and messing up my order).

 

[Michael74]

inflation is coming because dems in California are giving their base $15 an hour for flipping cheese burgers at McDonalds (and messing up my order).

Yes, that's ridiculous. How do they expect regular people to afford burgers? Its not like they are giving everybody else the same COLA too so they can buy the burgers. All they are doing is preventing the fixed income elderly from going out to eat.

Better to just have honest money, and not endlessly argue about what is the appropriate COLA for minimum wage. If bankers stop creating inflation, the majority would be better off. Wages stay the same, and buy more over time. Everyone gets the same raise that way, even retirees on pensions.

 

[Michael74]

...a sensible purchase price.

That last requirement proved a barrier to virtually all deals we reviewed in 2017, as prices for decent, but far from spectacular, businesses hit an all-time high.

Warren is not finding many good deals nowadays.

 

[Willie T]

Yes, that's ridiculous. How do they expect regular people to afford burgers? Its not like they are giving everybody else the same COLA too so they can buy the burgers. All they are doing is preventing the fixed income elderly from going out to eat.

Better to just have honest money, and not endlessly argue about what is the appropriate COLA for minimum wage. If bankers stop creating inflation, the majority would be better off. Wages stay the same, and buy more over time. Everyone gets the same raise that way, even retirees on pensions.

You seem to follow economics. Do you think ANY developed country will ever see "Honest Money" again?

 

[Michael74]

I hope so.

Divers weights, and divers measures, both of them are alike abomination to the Lord. Proverbs 20:10 KJV