Reinko

Can the Dow and S&P Last 15 Rounds?

There are a few unmentioned factors that could make the downflip even larger:

For the first time in history (of this fiat money system) total bank credit in the USA is declining, link:

research.stlouisfed.or...

Actually this decline is more than it shows in the graph, I have seen a more recent version that shows a clear tipping point.

In the graph from the link you see total debt of the US commercial banks is about nine trillion, the US financial sector as a whole has over on gross domestic product of debt on herself. Link (see the one last column):

www.federalreserve.gov...

Actually it says 15945.7 billion US$ or 16 trillion and thus more than one GDP. When people start thinking about how this mountain of debt is going to be paid for, there is plenty of room for the stock indices to decline much further.

Just a little experiment of thought: Suppose there is a 5% interest level on this 16 trillion, that means yearly interest paid is 800 billion US$.

Of course a lot of that interest is from the fin sector to the fin sector, but in the end these interest payments work as a big tax on the entire sector.