I'm not going to blame Trump for hyping up the economy or his contributions to it. He's a politician. That's what they do. But there's no reason for us to expect — or bet our money on — the rhetoric being able to continue propelling the economy forever. That's just not going to happen.
Realistically, the boom has to end with a readjustment.
The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers' stone to make it last.
— Ludwig von Mises, Human Action: A Treatise on Economics (1949)
Way back when I was first learning the stock market, one of the many things my mentor repeated to me many times was this:
Trees don’t grow to the sky. Neither do stocks.
What he meant was vertical growth is great. But obviously constant vertical growth is impossible. Stocks, markets, businesses, and industries at large also need to maintain horizontal growth. And it's healthy when they do.
What I'm getting at is the recently revised GDP growth could be a screaming indicator that it's time for a readjustment.
But it's probably not the end of the world as the result of some apocalyptic market crash. We could be headed for a longer, more drawn-out cool-off. (That would be ideal, actually.) To expect a Venezuela type of situation would be foolish.
Yet that doesn't mean we're not really in a crisis right now.
