The last Bubble 2

SGG tends to believe that a general market holiday is an option with growing tangibility.

As previously stated, the main problem is the overwelheming stock of financial assets (400%- 1000% world GDP) facing a narrower liquidity door. It looks like that an emergency market holiday is becoming a palatable option.

In regards to the last Bubble, here is a real snapshot of the underlying stress of the EU sovereign bond market.  As you can observe, the spread between Germany and Italy 10 years sovereign is worrying and yields are increasing.

The EURO might benefit from some shortage too at times but the main shortage is in USD.  No asset class is resisting and our dear friend Ray Dalio, will enter history for his famous Jan/20 quote “Cash is Trash”.

Money velocity was already going down and the present situation has probably induced a maximum collapse

Since the great majority of investors have not been able to adjust their portolio, it makes me think that the pain factor will become an important factor if regulators and governement decide to negociate some solution…

As I said, our trust in government is eroding. Investors need to think about how they will want to be when the  worse is over.