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Strange Times and Unusual Markets

By Richard Russell

 

The world is suffering from our current predicament. There's too much debt and the debt is causing deleveraging and deflation. Normally this would lead to a primary bear market. The central banks believe that by keeping short rates near zero and creating more liquidity through QE, the economies of the world can be rejuvenated. Thus, the answer to the ocean of debt is to pay it off by rejuvenating the economies through QE. This is comparable to lifting yourself up by pulling on your boot straps.

As I see it the forces of deflation and deleveraging will ultimately overcome everything else. The power of compounding debt will produce the greatest bear market ever seen. What will end the bear market? Exhaustion and refusal of investors to continue selling. Near the bottom of the bear market we will see the destruction of all fiat currencies and new currencies will have to be created. Each of these new currencies will ... Log in or subscribe to continue reading.


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