About The Investment Rate (IR)
The Investment Rate defines long term growth rates in advance, so you know what to expect before it happens. It has predicted, in advance, every major longer term economic cycle in US History.
The Investment Rate (IR) is a derivative demographic analysis that measures lifetime investment cycles based on ingrained societal norms, to offer a forward-looking observation of the natural demand for investments over time
Specifically, the IR measures the rate of change in the amount of NEW MONEY that will be available to be invested into all assets over extended periods of time, looking ahead by more than 40 years. NEW MONEY matters most to growth, so the IR defines natural growth rates.
History Shows us, the IR identified The Great Depression, Stagflation, and the up periods in between perfectly, and also the beginning of the Credit Crisis, so this is not a short term indicator by definition, but it can be used to define short term moves from time to time as well.
The IR influences the demand for stocks, bonds, and real estate, as well as private business development. In other words, it tells us what growth will look like.
Simply, it measures liquidity, NEW MONEY, and when we know what this will look like going forward we are able to gauge the environment that will lie ahead. This forward-looking observation helps us position our businesses, as well as our investments, for the long term cycles that are forthcoming.
Until Ben Bernanke introduced Central Bank Stimulus on the heels of the financial crisis, the demand that the IR measures was the only identification of NEW MONEY. Because we cannot churn old money and expect asset classes to grow, it was also the sole root of growth, but when Central Banks flooded the market with liquidity that would not have otherwise been there, a second catalyst began to play a role in this Demand Side observation.
The IR plus Central Bank Stimulus defined demand since shortly after the credit crisis, and that has not stopped, but the Central Bank variable has changed dramatically. As of January, 2018 the Central Bank influence was not only not a positive influence on liquidity anymore, but it also was poised to become a negative.
Our recent Liquidity Observations entail both the Natural Demand that is defined by the IR and the Central Bank influences, but given the diminishing influence of Central Banks on NEW MONEY the IR, an unyielding natural demographic demand observation, dominates again, just like it has since 1900.
If you want to know what growth will look like going forward, the IR and our Liquidity Observations will tell you. Past reports and a current read of the IR are available to now, and we provide our subscribers with updates periodically as changes to liquidity and NEW MONEY become clearer.
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