Well, what other predictions should we expect from the highly-regarded Dr.Gloom? Not that we disagree, but we do know that precise market timing is not a science and few have ever mastered the skill with any real degree of consistency. Still, because of the long period of record low interest rates the potential for a major collapse remains in the cards, Spiking borrowing costs will deflate most financial assets in a significant way - possibly by 50% or more. Spelling big troubles for the global financial system as well as markets.
That's not all we should worry about, as social unrest is still spreading through-out the world leading to further geo-political tensions. Should these tensions cause conflicts and lead to disruptions in the supply of oil - one result would be a spike in prices of 100% or more. More importantly, food costs which have shown a high correlation with oil, would move in tandem with oil's upward price increase. Not good: as it will again lead to deeper and broader social unrest turning to geo-political tensions, and then again spikes in the price of oil along with other non-renewal energy resources.
The picture is not good, as once the snowball begins to roll down the hill, the social-political-economic avalanche may set the stage for humanity's final chapter. Sound familiar?
Dr Peter G Kinesa
June 8, 2013