The Capital Goods Sector (Autos, Construction, Major Industrial Equipment, and So On)
Super-high interest rates, coupled with a big economic slowdown, will be very bad news for the Capital Goods Sector. As we discussed earlier, massive money printing by the Federal Reserve’s program of QE, both past and future, will drive up inflation and interest rates to unprecedented levels. High interest rates will make borrowing money very expensive for individuals and for businesses. High interest rates will be nothing short of an unmitigated disaster for the Capital Goods Sector, which depends on customers having access to low-cost capital. And sky-high interest rates will add to the reasons why recovery after the Bubblequake will take far longer and be more difficult than in previous recessions.
Most Businesses Will Fare Poorly in the Capital Goods Sector
We won’t dress it up for you. The bottom line for business owners in the Capital Goods Sector is not pretty. If you can sell now and get out, you should. No one can predict exactly when the Aftershock will hit, but even if it takes another three years (or more), the marketplace for your business is unlikely to improve much. In fact, the value of Capital Goods Sector companies will decrease substantially as unemployment continues to rise, and the economy continues on its slow growth or no growth track. So if you have a business in the automotive, construction, industrial equipment, or any other Capital Goods industry, the longer you wait ...