SOS Boom or Bust

Andy Xie in his latest article wrote about Boom or Bust, he says Bust. The stimulus has distorted the real underlying of the economics.

Roubini says W shape and a long U recovery. Actual deleveraging is far from over since the government has socialised all the losses via it stimulus and bailouts

Robert Prechter says, we are not out of the woods yet.

The Ponzi scheme in the fractional system has comes to the end. Investment bank gears up to 1 to 50 times debt. The financial institution will continue to deleverage a lot faster than the government's printing machine. Due to this factor, banks or financial institutions are not able to provide new credit until the existing debt are being settled or restructured. The amount of credit in the system will shrink so fast so much that it will cause lack of credit in the system, causing deflation. Yet the printing of money will eventually cause hyperinflation in a later stage after the deleveraging plays its effects.

Meaning, mosts assets class will goes down, stocks, commodities, gold, real properties, "empty boxes or derivatives" Only when deveraging has fully take its effect, which may take a few years, and growth to resume after that, then inflation will creep in so fast that the US dollar will collapse in the end.

Meanwhile, once the liquidity is dry up, in a couple of months, the scene will shock the bullish investors once again. This second round, there will not be any more mercy, all major stock markets will bust.

MyView

Drastic deflation will take place first, until deleveraging has runs its course, then hyperinflation will sets in.