I’ve long predicted that the balance sheet recession was likely to come to an end somewhere around 2013/2014 and it looks like the de-leveraging process in the USA has certainly slowed. This excellent chart from Morgan Stanley (via Joe W) shows how the de-leveraging has improved over the years. Unfortunately, we’re not quite at a point where the public sector can hand off the baton yet. We still have some work to do so we’re likely looking at something closer to a 2014 hand-off of the baton. Of course, that’s assuming the fiscal cliff doesn’t torpedo the private sector recovery right when it looks like it’s starting to catch its footing….
Source: Morgan Stanley via Joe Weisenthal
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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