There are huge differences. Reagan inherited a 14 year bear market in stocks and 34 year bear market in bonds. Government debt/GDP had continually fallen since WWII. The baby boomers were moving into their productive years. The IBM PC was just launched. The Soviet empire was on the verge of collapsing. Trump is inheriting asset bubbles in stocks, bonds, and commercial real estate. Total debt/GDP is at record highs, rates at all-time lows (with much of the world’s sovereign debt actually dipping into negative yields not long ago). Boomers are just moving into retirement which will swamp an entitlement system that was never reined in. Bonds are probably on the verge of a multi-decade bear market. The government’s interest costs will explode as the political class structured its debt on the short end of the curve, assuming rates would stay low forever.
Why anyone in his right mind would want to put his name on this Hindenburg is beyond me. But, heck, the Trump brand has been immune to economic forces in the past, so why
not?
~ Kevin Duffy
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