Image Source: Pixabay

The Great Global Melt Up is accelerating now.

As we’ve noted previously, the stage is set for a spectacular stock market bubble.

The fact is, and it’s a very simple fact, that there is too much debt in the world. There was already too much debt before the pandemic, but once the lock downs were introduced, governments and central banks around the world went on a spending binge the likes of which the world hasn’t seen since WWII.

This overspending continues today, despite the fact the lockdowns have ended. While deficits as a percentage of GDP are down from their pandemic highs, the fact remains that deficit spending for most countries remains higher than it was prior to the lockdowns.

Consider the U.S.: the image is clear, once the door was opened to massive money printing/ overspending, policymakers don’t know how to close it.

(Click on image to enlarge)

Against this backdrop of overspending/ debt issuance, central banks have begun a coordinated easing cycle. The European Central Bank (ECB) has already cut rates eight times… The Bank of England (BoE) has cut rates five times…The Swiss National Bank (SNB) has cut rates six times to ZERO. And the Fed just implemented its first cut in 2025, with the Fed dot plots forecasting two more rate cuts by year end.

Thus, we have government overspending, which involves incredible debt issuance, at a time when central banks are easing monetary conditions (making credit cheaper) with another round of debt monetization/ yield curve control coming shortly.

This will unleash what I call the Great Global Melt Up: a spectacular bubble during which risk assets (gold, stocks, bitcoin, etc.) will rise to ridiculous levels. As I write this, stocks, gold, and bitcoin have already hit all-time highs.

But before the smoke clears, I wouldn’t be surprised to see all of them MUCH higher. Remember, we’re talking about a global overspending by governments combined with coordinated easing by central banks. As currencies fare aggressively devalued from this, investors will eventually have no choice but to move into risk assets to maintain their purchasing power.

So, you NEED to take advantage of this while it lasts. Because once this bubble bursts, the coming crisis will destroy trillions of dollars in wealth.

More By This Author: