01.12.16
The Doomsayers are at it again. With China stumbling, commodity prices tanking, Europe quantitative easing and the stock market faltering, more than a few observers say this modest 7-year expansion is coming to a close. A few pundits go so far as predicting a Greater Recession than the Great Recession of 2008-2009.
One analyst has gone even further than most. In his new book, “The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril,” author Satyajit Das insists that the global economy is entering an era of protracted stagnation, similar to what Japan has experienced for decades.
At first glance, Das may be correct; after all, market rallies can’t last and economic expansions, no matter how mild, can’t go into perpetuity. But when the author is described as a consultant “who predicted the Global Financial Crisis of 2008,” it sets off my BS-o-meter.
Who are all of these financial geniuses that foresaw economic turmoil and called the market correctly? Who exactly did they tell about the pending economic collapse? Their moms? Or maybe, their Uncle Stanleys? If they are so wise, why are they writing books? After all, there are many other ways to make millions; especially when you know which way the market is turning (see: The Big Short).
No, when it comes to destruction, economic or otherwise, no one can be sure when it will occur. Or, to quote another author: “But about that day or hour no one knows…”
The soundest advice I've ever read went something like this: "Spend less, much less, than you make. Save your money and invest. The stock market returns the most over the long haul, but don't invest any money that you may need in the next five years." Or, to put it more succinctly, save the 16 bucks you would’ve spent for The Age of Stagnation and buy on the dips—don’t take advice from them!
One analyst has gone even further than most. In his new book, “The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril,” author Satyajit Das insists that the global economy is entering an era of protracted stagnation, similar to what Japan has experienced for decades.
At first glance, Das may be correct; after all, market rallies can’t last and economic expansions, no matter how mild, can’t go into perpetuity. But when the author is described as a consultant “who predicted the Global Financial Crisis of 2008,” it sets off my BS-o-meter.
Who are all of these financial geniuses that foresaw economic turmoil and called the market correctly? Who exactly did they tell about the pending economic collapse? Their moms? Or maybe, their Uncle Stanleys? If they are so wise, why are they writing books? After all, there are many other ways to make millions; especially when you know which way the market is turning (see: The Big Short).
No, when it comes to destruction, economic or otherwise, no one can be sure when it will occur. Or, to quote another author: “But about that day or hour no one knows…”
The soundest advice I've ever read went something like this: "Spend less, much less, than you make. Save your money and invest. The stock market returns the most over the long haul, but don't invest any money that you may need in the next five years." Or, to put it more succinctly, save the 16 bucks you would’ve spent for The Age of Stagnation and buy on the dips—don’t take advice from them!