Folks might ignore or downplay all they will that mountain of debt whose first feature leading to crisis in 2008 remains intact today: the utter physical economic incapacity to generate such new wealth as can sustain present liabilities. Any doubt the trans-Atlantic financial system continues facing a solvency crisis, then, merely is a wishful dream.
Likewise is belief in the power of regulatory authorities to navigate a soft landing. Rather did these agencies fully relinquish their ultimate power to regulate when the Ponzi scheme that is the securitization regime was allowed to become the dictator of policy. All capacity to prevent calamity was lost then, as secure connection between finance and physical economic activity was cast to the wind in a market geared by tax policy favoring asset stripping and leveraging.
So, backed into a corner, those whose misguided views continue holding power over policy accelerate a hyperinflationary trend in place over the past forty years, attempting to maintain the "money-ness" of all financial claims piled up against an ever-collapsing physical economic capacity. Yet this is occurring in a new epoch where confidence in credit markets shall not soon be restored, this the very consequence of power regulatory agencies relinquished in allowing the banking system to become hopelessly entangled in what amounts to nothing more than a Ponzi scheme.
Thus, a global liquidity deluge can only hasten the ultimate demise of all that purportedly is being supported with such policy. While an increasing bulk of credit falls into disarray and gobs of liquidity thrown at the growing problem largely is drawn into areas where confidence has not been crushed, the breakdown of the global physical economy can only accelerate, thus all the more furthering the negative feedback loop that became preordained when regulators were seduced by securitization and the fallacy of risk mitigation this regime claimed to offer.
Truth is those burying from thought this reality appear near to being exposed as little more than duplicitous salesmen. Most troubling (as well as most likely), these represent a mass of wealth that, will not discover until it is too late the error of bliss ignorance toward dynamics presently driving financial and economic collapse. Indeed, this probability finds fitting an outlook where the stock market's sharp and rapid decline could prove the worst ever, as well as not be recovered anytime soon after. Today's well-demonstrated complacency amidst still-growing vulnerabilities worldwide represents an anomaly whose resolution stands to fill a river of tears...
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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.
Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.
Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.
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