The Crash of 2018?

Despite the fairly rosy economic reports, the next financial crisis, recession, or perhaps even depression is most likely already baked into the cake at this point.  It is not a matter of if, but WHEN, and just how bad it will be.   In fact, we are overdue for one.  And the beginning of the slump will be one of those things that will only be noticed in hindsight, as was the case last time ten years ago.  And this one may very well make 2008 or even 1929 look like a walk in the park.

The positive economic numbers mask a rather dismal underlying reality just beneath the surface:  wages lagging behind the true cost of living, and (not coincidentally) unsustainable record-high levels of consumer debt.  This time the debt increase is not primarily mortgages (though there is plenty of that too) but is now mostly student loans, along with that perennial, decades-old papering-over-declining-wages tool: credit cards.  In fact both are a result of a problem decades in the making:  reverse Robin Hood economics has robbed from the poor, gave to the rich, and torpedoed the middle class as the real economy has been systematically hollowed out since Reagan.  And the debt has become a way to artifically and temporarily sustain ever-increasing consumer spending (and thus economic growth) despite stagnant or declining wages for the bottom 80% of Americans--and eventually even that becomes insufficient, and the house of cards collapses.  That is the powder keg, just waiting for a spark to set it off.  And practically any sort of "black swan" event could serve as the spark at this point.  Here be dragons.

The stock market is a bubble.  Scratch that, it is a big, festering BOIL just waiting to be lanced.  The recent "correction" in early February is a warning, followed by a return to "normal" before the Big One happens sooner or later.  If Trump goes through with his plan to start a trade war, that will likely trigger the crash, as will any further increases in FERAL Reserve interest rates.  But it looks like a crash is coming, one way or another.   So don't say we didn't warn you.