World stock markets fell Wednesday while the dollar dropped to a near five-month low against the euro after the Federal Reserve indicated that it was ready to provide more assistance to the flagging U.S. economy.
Capital flows represent the flight to safety associated with global currency debasement. The rising trend in equities reflects a portion of these flows.
The rise in German equities during the Weimar Experience must be heeded as a warning for the equity bulls. A trend sustained by currency debasement is not sustainable. The negative divergence of trend energy with the S&P 500 reflects what certain to be one of many cracks in the façade of this currency-driven up trend.
S&P 500 with NYSE Volume:
Source: finance.yahoo.com
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