Big debt is deflationary because it takes a lot of needed cash to carry big debt. The US has doubled its total debt over the last seven years, and this in the face of almost zero interest rates. The US is now borrowing just to pay the interest on its debt. We're compounding ourselves into national bankruptcy.
Make no mistake about it -- what we're now experiencing is not a gathering stock market correction. This is the resumption and continuation of the primary bear market that the Fed interrupted at the 2009 low. Once a primary trend gets underway, it will always carry to conclusion. Primary bear markets don't end with Fed interruptions -- they end in exhaustion -- when the last investor can't take it any longer and when the last investor throws in his stocks for whatever the market offers.
With the dollar now collapsing, it will require an increasing number ... Log in or subscribe to continue reading.
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