Amid what has become a nearly constant stream of alarming news from nearly all parts of the globe, the US Economic growth has quietly been gaining steam and poising itself for staggering growth over the next four to nine years.
Our faithful readers over at The Mint are aware that we religiously follow a baker’s dozen of key indicators in order to gauge the actual state of the economy via money supply growth and some of the key data points as to what expectations are as to the future state of the money supply. The state of the money supply gives us a sense as to what will happen in terms of employment and asset prices, the fodder which ultimately impacts GDP. Overall, our key indicators have been steadily signaling growth ever since 2009.
While the fuel has been amassing for approximately 5 years now, it is now poised to be coupled with the proverbial spark necessary to spur domestic growth rates: Improving sentiment.
You won’t see improving sentiment on TV, hear it on the radio nor read about it in the news. Rather, improving sentiment can be seen in a very conspicuous place in American cities: Increased traffic, be it car, pedestrian, freight, or public transit. When people are out and about, they are generally doing something. The fact that more people are out tends to beget additional economic activity. It is largely a chicken and egg question but in the cities, when you see traffic increase, it is a good bet you are witnessing economic growth first hand.
Have you seen traffic on the rise where you are? We have in Portland.
You might ask what will drive this expansion? While there is no specific catalyst or new age industrial revolution on the horizon, there is an avalanche of hot money itching to get out of government bonds and into something that will paradoxically give it increased yields and security.
If history is any guide, this hot money will find its way into real estate, which is now surprisingly affordable on a relative basis. Once that happens, the long awaited expansion seems inevitable.