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.

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.

Central Bank Liquidity Expansion

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

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

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