The Perfect Financial Storm


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There is an excellent series of articles by James Puplava which go under the collective title of "The Perfect Financial Storm" at the Financial Sense website:-

These have been published periodically over the last 18 months or so. You can get a flavour from the 10th one, which brings all the threads together, but the entire series is worth reading. It gives reasons for the bear-market from a fundamentalist point of view. This series of articles is in complete synch with the story told so graphically by the charts over the last 12 months.

For instance, consider the following from 26th May 2001 :-

Burgeoning debt burdens held by consumers and corporations, a negative savings rate, and a monstrous trade deficit are shallowly ignored by the media and financial press. Everyone believes in a V-shaped recovery or the so-called "soft landing". The financial bubble is simply ignored. Wall Street believes that an inventory problem is behind our current troubles. Dividend yields of less than 2%, a P/E ratio of 28 for the S&P 500, or a negative P/E for the NASDAQ is irrelevant. There is too much confidence and complacency. That is where the danger lies. When there is this much complacency, it is usually shattered by an unexpected event. I will repeat something that I wrote in Rogue Wave that is relevant to today’s smugness.

"There will come a day unlike any other day, an event unlike any other event and a crisis unlike any other crisis. It will emerge out of nowhere at a time no one expects. It will be an event that no one anticipates - a crisis that experts didn’t foresee. It will be an exogenous event - a rogue wave".

Anyway - it's all free, so have a read and make up your own minds

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