The United States is in an asset price bubble.
Asset Price Bubble Checklist
1. Rapid Acceleration of Asset Prices
2. Overheated Economic Activity
3. An Uncontrolled Money Supply
4. Uncontrolled Credit Expansion
The United States meets all the criteria, being flagrant offenders of 3 and 4.
The economic situation in the US mirrors the Japanese Asset Price Bubble (wiki link) to an alarming extent. Years before the economic decline started, the Japanese government implemented aggressive fiscal policy (increased public investment) and expansionary monetary policy (dropped their interest rate).
The US has the same fiscal/monetary policy stances.
From 1989 to 1994 the NIKKEI 225 Index grew from $10000 to $38916 (231%). Economic deflation started draining the economy in 1991 and lead Japan into economic struggles for nearly 20 years (1991-2010). The first ten are commonly known as the lost decade, the full time period known as the lost score.
The S&P 500 keeps setting new all-time records, the price is the highest it has ever been in history.
All Time High - $2175 - 7/22/2016
Why are interest rates still close to 0%?
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