Lowenstein: Thanks to Greenspan and Bernanke, The Next Crisis Could Be "Even Scarier"

While fear mongering sells subscriptions, it is also easily marginalized or discredited through the lunatic fringe argument. As such, I always try to refrain from supporting, "watch out for the next big one around the corner." What I will say, is that the sequence of hemorrhage and injections, or liquidity driven bull market and crisis within the depressionary box remains unperturbed.

As nominal stock prices are pushed higher by liquidity, they are nearing “heavy anvil-like” resistance in real terms. This suggests that any continuation of the equity bull, spun by the media as a reflection of the new economic boom, will have the unintended consequence of pushing up gold a lot faster.

When the liquidity driven bull phase is over, another hemorrhage phase will materialize. Will the next crisis phase be “even scarier”? History will be the judge of that. What is likely is that the next hemorrhage phase, through the power of repetition, will teach humility and respect for the unintended consequences of free money so easily embraced since 2001.

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Source: finance.yahoo.com