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Gordon Long

Gordon Long

Mr. Long is a former senior group executive with IBM & Motorola, a principle in a high tech public start-up and founder of a private…

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John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

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DOW 20,000? or 5,000?? Part III

DOW 20,000? or 5,000??

22 Minutes, 31 Slides

In Part III of this series we ask John Rubino whether DOW 20,000 is directly ahead or DOW 5,000, and when?

John believes we are at a critical inflection point with two powerful forces competing. Whether Central Bank liquidity and credit expansion wins, or the realities of the economic and financial fundamentals, only time will tell us for sure.

Financial Leverage

The magnitude of financial leverage is now greater than levels during the 2000 Dot-com bubble and near pre-financial crisis highs. When calculated on a credit balance basis it is significantly worse than the 2008 Financial Crisis.

NYSE Margin Debt versus S&P500 Chart

NYSE Investor Credit and Market Chart

Signs of Zimbabwe and Venezuela Behavior are Evident

Signs of Zimbabwe and Venezuela central bank policy approaches are creeping into the developed world as pressures are applied to sustain a now tepid and failing economic recovery. After 4 years of relentless liquidity injections the options are becoming limited and the road appears to lead towards a classic von Mises crackup boom in equities.

Zimbabwe Industrial Index Chart

Caracas Stock Index Chart

Central Bank Liquidity Expansion

The answer to the riddle may possibly be found in what the Fed will ultimately be FORCED to do.

Fed Assets Holdings Chart

Also listen to Part I with Lance Roberts and Part II with Charles Hugh Smith

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