Bad Omens Spotted

Is the Debt “Super-cycle” Ending? Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] Bad Omens Spotted - Economic confidence is declining rapidly… - What is the bond market telling us?… - Economic winter… Recommended Link [Billionaire Leaves Crowd In Shock]( [Read more here...]( An audience of a few hundred (including myself) quietly gathered in Washington D.C. a few months back. That’s when the world’s richest man, Elon Musk, took the stage… and shocked the entire room. It all has to do with this image you see on your screen… showing a surprising new discovery he’s made. Not only will this blow you away… it could also transform the American economy forever. [Click here for Elon’s shocking reveal (plus see what it means for you)…]( Annapolis, Maryland August 18, 2021 [Brian Maher]Dear Reader, Ill omens gather… Consumer confidence — as tracked by the University of Michigan — has endured a severe letting down. Reuters: The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of this month from a final reading of 81.2 in July. That was the lowest level since 2011, and there have been only two larger declines in the index over the past 50 years. Those were at the depths of the 2007-2009 recession and during the first wave of shutdowns in April 2020 at the beginning of the pandemic. Meantime, Rasmussen reports economic confidence has declined three consecutive months. Its Economic Index scaled 123 in May. It presently reads 106.6. Copper — Dr. Copper, as it is known — takes an accurate economic temperature. That is because copper has broad industrial application. And copper prices presently go at two-month lows. China Is Slowing Next, we peek under China’s economic hood — and we discover a leak. The Delta variant… so-called… is on the prowl. The authorities are out to seize it by the collar. And so they are mandating fresh jail-ins. The homebound do not slave in factories. They do not load cargo onto seagoing vessels. And so the globe’s economy will absorb a blow, explains Jim Rickards: China is now imposing extreme measures including cancelling many domestic flights, closing ports and restricting vacation travel. China’s economy was already slowing before this new wave of the virus. Given China’s more extreme forms of COVID control, their economy will slow even further. That’s bad news for China – and bad news for the world. Global growth will slowly noticeably in the months ahead, partly because of the extreme nature of China’s lockdown approach. Look to the Bond Market The stock market bounces along at record heights, it is true. But if you seek a true economic reading, do not look to the New York Stock Exchange. It is the wrong address. Look instead to the bond market… 10-year Treasury yields registered 1.74% on March 31. They presently run to 1.28%... a plummeting so severe... Jim Rickards labels it “an earthquake in bond land.” As a rule — as a rule — yields rise on flowering economic expectations. They decline on withering economic expectations. History is with the bond market. It gives a much clearer economic telegraphing than the stock market. New York Times economics reporter Neil Irwin: Savvy economic analysts have always known the bond market is the place to look for a real sense of where the economy is going, or at least where the smart money thinks it is going. Recommended Link [Prepare for America’s Trojan Horse…]( [Read more here...]( The left’s plan to push America into a socialist nation is finally coming to fruition right before our eyes… But what could happen “next” will have a tremendous impact on your everlasting wealth. [Click here to see why…]( Searching for the Signal Within the Noise Here we file a caveat: The bond market no longer broadcasts in high fidelity. The Federal Reserve has jammed the signals… and bonds are transmitting the sound of raining gravel. But we press our ear to the speaker and detect a faint signal within, beneath, above the static. As the mighty Titanic was warned of North Atlantic ice, the bond market is warning of ice ahead. Billionaire hedge fund manager Ray Dalio has identified two separate debt cycles — short-term — and longer-term “super-cycles.” Short-term cycles last some seven or eight years on average… and track with general cycles of boom and bust. But of these super-cycles Dalio says: “There are limits to spending growth financed by a combination of debt and money,” adding: “When these limits are reached, it marks the end of the upward phase of the long-term debt cycle.” Overdue Dalio finds the “super-cycles” of debt usually endure 50–75 years. The last super-cycle began shortly after World War II — which ended in 1945. The year is presently 2021… and 75 years worth of sand have emptied from the hourglass. That is, the super-cycle’s end is overdue. Niels Clemen Jensen is founder and CIO of Absolute Return Partners. “Debt super-cycles always end with a big bang,” he informs us. And the longer the cycle, the louder the bang. Recommended Link [$10 billion bet... this is a real winner]( [Read more here...]( The world’s second-richest man is ALL IN on his biggest bet yet. He’s already committed $10 billion to it. The way I see it... this is 1997 and the dawn of Amazon all over again. Back then, the retail industry was completely disrupted. This time around it’s another major $2 trillion industry that’s in the line of fire. Missed taking Advantage of Amazon? Don’t miss again. The stakes are huge. The Government has approved it. The timing is right. [It’s a Win Win Win situation. Click Here.]( What’s the Limit? We do not know if present indications suggest the end of the debt super-cycle. Our telegraph deciphering is poor. And we have reported false signals on too many occasions. Yet, we know the nation’s debt runs to $28.6 trillion. We know this also: The United States Congress is fixing to pile a handsome amount upon that $28.6 trillion enormity. We further know that the business has a limit. That is not quite true — we believe strongly it has a limit. We must admit it, we are not certain. If a limit does exist, we are unable to identify it. $30 trillion? $36 trillion? $41 trillion? $97 trillion? The answer is on the knees of the inscrutable gods. But as the weather has its seasons, the economy has its seasons… Summer, winter, fall, spring. Keep the Gloves Handy As we have argued before, climate is what you can expect. But weather is what you actually get. Sometimes summer extends far into fall before letting go… before nature slips off her green dress… and into her autumn pastels. And sometimes winter’s iron grip holds deep into calendar spring. Summer, winter… we do not know which will prevail ultimately. Perhaps the Federal Reserve and the fiscal authority can even extend the season, hold the sun up in the sky a bit longer. Yet it would only deepen the eventual freeze and thicken the ice sheets. Recall, the longer the cycle, the greater the coming down. We are presently outfitted for summer. Yet the Horae — the Greek goddesses of the seasons — are fickle and capricious beings. They resent man’s encroachments upon their domain. And so we have our winter apparel ready… Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning Editor’s note: If you believe Joe Biden is about to pull off a miracle for America's "post-pandemic" economy... Jim Rickards says you're in for [a potentially tragic surprise.]( According to Jim, Joe Biden's widely touted "rescue plan" for post-pandemic America is not only doomed to fail, it hides a dirty financial secret Joe won't share. [Here Jim reveals what Joe's hiding — click to see.]( Of course, Jim also shares details on how to protect yourself. It's certainly not what the mainstream media wants you to believe right now. But it's a message Jim says you need to hear. [Go here for details.]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Brian Maher][Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. 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