Increasing debt and leverage for an economy with a diminishing working age population is not sustainable. Without the demographic windfall of immigration or procreation, increasing productivity is the only way to sustain real economic growth. The short term financial wizardry of the share buy-back is a function of the artificially low price of credit.
The longer central bank sponsored largesse continues, the lower the trend rate of GDP growth will become. A combination of fiscal reform and gradual normalisation of monetary policy could redress the situation but I believe it is politically unachievable. Markets climb a wall of fear, even at these exalted levels, it still makes sense to be long bonds, stocks and real-estate but, once the limit of government intervention has been reached, the “levee gonna break”.
Finding Trout In Your Milk?
“If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful.” The Danger of American Fascism, Henry A. Wallace, 1944