22 Minutes, 31 Slides
In Part III of this series we ask John Rubino whether DOW 20,000 is directly
ahead or DOW 5,000, and when?
John believes we are at a critical inflection point with two powerful forces
competing. Whether Central Bank liquidity and credit expansion wins, or the
realities of the economic and financial fundamentals, only time will tell us
for sure.
Financial Leverage
The magnitude of financial leverage is now greater than levels during the
2000 Dot-com bubble and near pre-financial crisis highs. When calculated on
a credit balance basis it is significantly worse than the 2008 Financial Crisis.
Signs of Zimbabwe and Venezuela Behavior are Evident
Signs of Zimbabwe and Venezuela central bank policy approaches are creeping
into the developed world as pressures are applied to sustain a now tepid and
failing economic recovery. After 4 years of relentless liquidity injections
the options are becoming limited and the road appears to lead towards a classic
von Mises crackup boom in equities.
Central Bank Liquidity Expansion
The answer to the riddle may possibly be found in what the Fed will ultimately
be FORCED to do.
Also listen to Part
I with Lance Roberts and Part
II with Charles Hugh Smith
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