In 2016, investors need to understand three things.
This economic and financial contraction will not be an ordinary cyclical recession. It is the backside of decades of debt growth in excess of economic growth and the peak of underlying social optimism which produced that unsustainable disparity.
Debt contraction and reversing social mood will be the unifying element of many seemingly unconnected stories this year. Raúl Ilargi Meijer at theautomaticearth.com noted this unification in an article featured on SLL.
If there’s one thing to take away from this year’s developments in markets and economies so far, it’s that they are all linked, they’re all part of the same thing. If you can’t see that, you’re not going to understand what’s happening.
Looking at falling oil prices as a separate thread is not much use, and neither is doing the same with Chinese stocks, or the yuan, or the millions of Americans who are one paycheck away from poverty, for that matter. It’s all one story.
