General Stock Ideas

[gfp927z]

The new debt bomb explained by Jim Rickards -

Trump says he wants a new Reagan type approach to restoring vigor to the US economy. This won't work today because -


1) The current debt/GDP ratio is 105%, vrs a mere 35% when Reagan embarked on the large deficit approach in the 1980s, which tripled the national debt in 8 years. Under Reagan, the debt/GDP ratio went from 35% to 50%. Trying that approach now, with the current debt/GDP at 105%, would be financial suicide for the US. Yet it appears that's what Trump's approach is, a Reagan #2.

2) Interest rates when Reagan became President were approx 17%, so economic growth could be generated as the interest rates fell. In contrast, today rates are near zero (1.5%), so no help there in generating economic growth.

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