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It’s Getting Ugly Out There (28:20 video, with Gordon T. Long)

Charles Hugh Smith – You’d have to be in full denial mode not to see that it’s getting ugly out there in global markets: currencies are melting down, trade and shipping are tanking, commodities are swooning and global stock markets are increasingly on central-bank life support.

Gordon Long and I recently discussed just how ugly it might get in a 28-minute video program.

One focus was Gordon’s forecast that the market may yet recover from its current downtrend and trace out a M Top: one more buy the dip rally that would then be followed by a bone-crushing downtrend as the wheels completely fall off the global “growth” story.

 

 

 

 

 

We also discussed a few of the most critical systemic sources of risk in global markets:

1. There’s too much debt globally; public and private debt has skyrocketed since 2008.

2. Mal-investment due to perverse incentives: corporations borrow money for stock buybacks rather than to invest in new productive capacity Continue reading →