Crash or Collapse?

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London Destroyed

QUESTION: You hear the big talk at Davos was the next big crash.  Roubini,..etc all the big economists are calling for one in the next 24 months and say its due for this business cycle to have a crash in bonds and stocks.


ANSWER: What I see is nothing like the traditional crash. First there will be the explosive advance in the stock market. This is a Sovereign Debt Crisis. There is no way the stock market will “crash” into some dark hole. For that to happen, confidence would have to shift from PRIVATE back to PUBLIC. That is just not possible when government is the problem. Even in hyperinflation all assets rise and the currency collapses. That is the extreme in isolated peripheral economies. That is not possible in the core economy. The British Empire collapsed from the peripheral inward leaving just Britain-Scotland-Ireland-Wales. Even that is now possibly breaking apart. Yet, Britain is not crumbling into dust as did Rome. The fall of Rome was a major collapse that led to a Dark Age.

This will not be like anything seen in past 200 years.