Monday, May 23, 2016
Here's why bull market in stocks and economic expansion guaranteed for next 20 years
There's only one statistic that you need to know to in order to understand what the outlook is for the economy and the stock market for the next 20 years and it's not how big the deficit is,
It's the fact that for the next 20 years 10,000 baby-boomers PER DAY will be retiring and becoming eligible to receive Social Security, Medicare and Medicaid.
Those problems are already 42% of annual Federal spending. ($1.8 trillion out of $4.3 trillion.) However, they're just going to continue to grow and grow and grow for the next 20 years.
You know what that is? It's government guaranteed income support. Just like what they're proposing in Switzerland only maybe half. Still, it's something and in the aggregate, when you consider the numbers--tens of millions of people--it's a massive and ongoing fiscal transfer to the economy.
This is why this recovery has lasted longer without a recession than anyone predicted (other than us, here). And it's why stocks keep going up.
With those kind of guaranteed flows the companies in the S&P 500 can ALWAYS squeeze out their trillion and a half or trillion eight of earnings.
Bull market...next 20 years.