The central banks are aware of a debt bubble. Their intent is to pop it. Leverage is a huge part of economic growth and it can only grow so much before it stagnates the economy. In order for markets (stock markets included) to continue growth, there must be a shock to the system that wipes out a large chunk of debt. This will be replaced by lower debt on cheaper properties and the cycle will continue. Let's be honest though. It is savings that builds an economy and when your savings generate more income, the better the economy will be.
Steve, another great article. When you say “there will be a steep price to pay a few years from now.” Can you elaborate as to what you are anticipating. Thanks!
The central banks are aware of a debt bubble. Their intent is to pop it. Leverage is a huge part of economic growth and it can only grow so much before it stagnates the economy. In order for markets (stock markets included) to continue growth, there must be a shock to the system that wipes out a large chunk of debt. This will be replaced by lower debt on cheaper properties and the cycle will continue. Let's be honest though. It is savings that builds an economy and when your savings generate more income, the better the economy will be.
Steve, another great article. When you say “there will be a steep price to pay a few years from now.” Can you elaborate as to what you are anticipating. Thanks!