Massive Currency and Debt Devaluations Lie Ahead

Currencies / Global Debt Crisis
May 22, 2010 - 12:07 PM

By: Bryan_Rich

The run-up in the stock market from March 2009 until last month was sharp and rewarding … for some. But there was one problem, it came with disproportional risk. You see, the stock market rose to an extent that it was pricing in perfection … a V-shaped recovery … a return to normal.

That overly optimistic view on the world can make for an ugly ending …

Because if there’s one thing we can assume after enduring a global meltdown of historical proportions, it’s this: A sharp return to normal is highly unlikely.

That common sense approach to risk aversion should be clear. And it’s why I find it troubling that stock market professionals have been scrambling to explain the recent decline in global stocks and other high risk investments.

They tell themselves, “This is just a healthy correction … earnings momentum is strong … the fear weighing on stocks is unwarranted.â€