This list is my choice of the top 5 charts I have happened across lately that are cause for great concern.
#1: The US Debt
Why is it a concern? Well, it’s rather obvious that the U.S. National Debt is growing by leaps and bounds and a large part of it is financed by foreigners. At some point repayment will become a concern. Of course, the inflation adjusted chart shows how the problem can also be inflated away, which appears to be the current strategy.
#2 Savings Rate
The chart clearly shows that there is now a negative savings rate. This is not sustainable long term. The only other time this happened was after the stock market crash of 1929. Are we also on the verge of a prolonged depression?
#3 Ajdustible Rate Mortgage (ARM) Resets
The chart shows that we are in for another major mortgage headache as the second wave of “Option ARMs” resets hits. For those that haven’t already heard, much of the current debt crisis is being caused by defaults on low rate mortgages resetting to higher interest rates. Option ARMs are often at such low initial rates that the principle balance grows until reset. Long story short, the subprime crisis is far from over.
#4 Oil Discoveries vs. Production Gap
I chose this chart rather than the usual “peak oil” chart because I think it gets the same message across without trying to pick a peak year for oil production. At some point production will follow the historical discovery curve, and start to fall. Without a clear energy successor waiting in the wings, the world will be dramatically changed by this event.
#5 Real S&P 500 Performance
This chart shows that the S&P 500 lost ground against many other assets since 1999. Putting your money in gold bars and sitting on it for the last 9 years would have been the best investment you could have made. But that’s not what the talking heads on CNBC tell you, is it?
