Jim Rickards was interviewed recently by Money Morning, and he presented 8 must-see charts …
1. Bang for the Buck
The bang for buck has plunged in terms of how much stimulus federal spending has on the economy … going from $2.41 per dollar spent in the 1950s and 60s to 3 cents per dollar now:
Of course, the government has been spending money on the wrong things … which don’t really stimulate the economy.
2. Money Velocity
The velocity of money is collapsing as fast as during the late 1920s … right before the start of the Great Depression (due to bad Federal Reserve policy):
3. Misery Index
The “Misery Index” – unemployment plus inflation – is worse than it was in the late 1970s:
4. Misery Index – Part 2
And worse than it was during the Great Depression:
5. Balance Sheet Leverage
The Fed’s balance sheet has exploded … and the Fed’s debt-to-capital leverage ratio has grown from 22-2 to 77-1:
6. Bank Debt Versus GDP
Bank debt is skyrocketing also, and is now growing 30 times faster than the economy (which is important since excessive private debt causes depressions):
7. Stocks Versus GDP
Stocks are now more than twice as overvalued – in terms of stock market capitalization versus GDP – as they were right before the Great Depression:
8. Dollar As Percent of Global Currency Reserves
And the dollar is declining rapidly as a share of global currency reserves:
|