WE ARE HERE - 18-YEARS LATER: THE NEXT FINANCIAL COLLAPSE IS NOW IN PLAY..

Consumer sentiment is rolling over across the developed world, sitting at or near multi-year lows.

In the U.S., the University of Michigan index has fallen to its lowest on record.

Europe isn’t any better – confidence remains deeply negative, particularly in Germany, still weighed down by energy shocks and cost pressures.

In Australia, sentiment has been stuck at recessionary levels for months.

The backdrop is clear.

Confidence is weak, conditions are tightening, and the cycle is nearing its end point.

Trump is now poised to preside over what would be the second recession in the U.S. since the 2008 financial crisis.

The only other President who has historically presided over both a mid-and end-of land cycle recession, was George Bush, who was president during both the dot-com mid-cycle bubble, and the 2008 sub-prime crisis. 

To see how this is going to play out, we don’t need to look back too far, either.

In June of 2019, Trump took a 72-hour trip to Japan and South Korea, proclaiming to his counterparts at the meetings and public events, that he had built ‘the best economy in the world.’

At the same time, almost un-noticed, the US yield curve inverted.

Within the context of the land cycle it was enormously significant.

It was 7 years post the point at which land values had started to make their ascent after the 2008 sub-prime financial crisis (in 2012) – marking the mid-way point of the land cycle.

A recession was nigh.

If you recall, back in 2019, it seemed that every time Trump’s critics attacked him, the DOW reached a new all-time high!

By December 2019, it was trading at over 100% of GDP! 

Warren Buffet once said this metric is ‘probably the best single measure of where valuations stand at any given moment.’

In other words, the DOW was significantly overvalued.

However, at the time, Trump couldn’t have been more jubilant!

He was channelling Yale economist Irving Fisher (one of the most respected economists in the world, a Yale professor, and widely trusted), who famously said in 1929 that stocks had reached what seemed a permanently high plateau.

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