Trying to Fit the Pieces Together

Michael Pettis' new blog post makes for some interesting reading. At the very bottom, he has a footnote showing the similarities between the US in the late 1920's, Japan in the late 1980's, and China today. Which begs the question, "How will the US of the future, being a deficit country today, be different from these previous historical examples?"

Will long bond rates stay low, like they did in the US for two decades, and still are in Japan? How much GDP growth can be gained from tariffs and dollar devaluation?

Oh, and one more bit of news. In a stunning development, US home construction "unexpectedly" dropped by 10.6% in October. No surprise here. Before reading the story, I knew it was due to multi-family construction. The home buyers credit has removed renters from the market, rents have been falling for a while now, and so there goes apartment building.