Click to enlarge.
The following chart shows the year over year change in the Leading Index of the United States. I have added short-term trend lines in blue and an apparent long-term floor in red.
Click to enlarge.
The following chart shows the real GDP per capita in the United States divided by the real GDP per capita in Japan. As seen in the chart, real GDP per capita growth has been extremely synchronized between the two countries since 2000 (a flat horizontal line in the chart means we're growing or shrinking at exactly the same pace). I might even argue that we've finally caught their disease.
Click to enlarge.
The 2-year treasury bond in Japan yields 0.11%.
The 1-year treasury bond in the U.S. yields 0.11%.
We don't seem to believe yet that ZIRP could be with us for a long time, even though it has already been with us for nearly 5 years. Perhaps investors expect the leading indicators to start ramping back up again at some point? I think they might, but only after the next recession, and even then only temporarily. Just an opinion. Sigh.
This is not investment advice.
Source Data:
St. Louis Fed: Leading Index for the United States
St. Louis Fed: Leading Index for the United States (YoY Change)
St. Louis Fed: Real GDP per Capita: U.S. vs. Japan
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