The Pendulum Continues to Swing Away From the Public To Private Sector

The transition from public to private sector can be best measured by the ratio between the total return of long-term corporate and government bonds. Capital began is slow transition from public to private sector from the lows of the Great Depression in 1932. These flows persisted until 1992.

1992 marked the beginning of the transition from the private to public sector in America. The culmination of the public flows ended in 2009 the great bailout of late 2008 and early 2009. Since then, the pendulum has begun to swing in the opposite direction. Capital is slowly being redirected away from the public to private sector as devaluation intensifies and confidence in the “public sector” for solutions fades.

Long-Term U.S. Corporate Bonds Total Return Index (LTCBTRI) to Long-Term U.S. Government Bonds Total Return Index (LTGBTRI):