Prepare for Prosperity - Credit Cycle Has Turned.

[Escort Rider]

To the OP: Whether you are right or wrong, it is satisfying to see an optimistic look forward in this forum when that look is reasonable, and I would say yours is reasonable. There has been so much doom and gloom, especially of the angry, exaggerated, and paranoid kind, which became very tiring. We may even yet see some in this thread in rebuttal to your prediction.

[jrkliny]

I don't agree with the logic involving the credit cycle, but I do think there are plenty of reasons to be optimistic. Unfortunately the internet seems to draw out those who have conspiracy theories, those who believe the sky is about to fall, and those fear that anything good must be just some sort of trick.

I see lots of positive signs for our economy. I also sign plenty of positive signs for investing and for the stock market. As a retired boomer, I am very happy to see my investments growing at a nice rate while inflation remains low and taxes are not increasing. Younger people are going to see even bigger opportunities. There are huge numbers of people approaching retirement and those retirements are going to create lots of job possibilities with a relatively low supply of available employees.

[Potential_Landlord]

Thanks for the nice comments. Maybe I should make it more clear. We have been through a historic economic period since 2007, one that only appears to occur every 75-100 years or so... the dreaded liquidity trap. In this particular situation people on aggregate try to save more than they consume. This has two consequences: a) it creates a deflationary depression as there is never enough demand, so companies downsize which reduces demand even further etc. and b) monetary policy loses its efficiency. No matter how low the interest rates fall it does not create the stimulus necessary. This really is an exceptional period. Nobody really understands or knows why everything is bad and not getting better. This is compounded by the fact that anyone living through the last period, in our case the GD, has passed away so we cannot ask anyone who remembers. Who even remembers Marriner Eccles, President Roosevelts FED chair and who IMO was one of the architects of New Deal and monetary stimulus to bring us out of the GD?
Just as mysterious as the onset of a liquidity trap is so seems its ending. Once credit growth is sustained again the lack of demand disappears and our accommodating FED policy will gain traction again and thus we (finally!) see a real recovery that deserves its name. This is what's going on right now but I suspect it will take at least another year for people to notice.
Anyways, I don't expect to see another liquidity trap for generations to come so we have passed a historic period... and we made it through alive! We all got hurt or bruised somewhat, but now it's time to look ahead to the good times again. Life is great and it will be unbelievably better going forward.