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SoT #41 – Wolf Richter: How Will The Global Asset Bubbles Unfold?

July 9, 2015

SoT #41 – Wolf Richter: How Will The Global Asset Bubbles Unfold?

Stock bubble, credit market bubbles and housing market bubbles.  Unfettered money printing by Central Banks globally have created massive bubbles of unprecedented proportions across all asset classes.

Once Government and the Central Banks lose the power to stop markets from going down, you’ll have situation that spirals out of control quickly.  – Wolf Richter, The Shadow of Truth

Wolf sees China eventually emerging as the world’s new number one, but believes that first it must “cleanse” the massive excesses – asset bubbles fueled by a massive credit bubble – with a painful financial and economic correction.

He also thinks that there’s a strong possibility that the 30% stock market correction in China is a preview of what is coming to the United States:

I am convinced that it’s very difficult to impossible to make a significant amount of money in U.S. stocks going forward. I think they’re all pretty much overpriced – way overpriced.  – Wolf Richter

The biggest problem Wolf sees with the United States is the Federal Reserve.  The Fed’s money printing has enabled the Government to incur a massive load of a debt and enables Congress to operate free from any budgetary contstraints:

As long as the Fed keeps buying Government bonds, Congress does not need to address this country’s fiscal problems.

Finally, we take a look at the reinflation of the housing bubble by the Fed.  Wolf is one of the few blog writers who offers insightful analysis on the housing market.

– See more at: http://thedailycoin.org/?p=35741#sthash.eL9uB69m.dpuf

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