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The Great Global Melt Up is taking a breather… but do NOT mistake this breather/ correction for the end.

Globally, the world is awash is too much debt. The US has a Debt to GDP ratio of 120%. Europe is ~100%, though numerous large countries (France, Italy, Spain) are well over that. Japan has a Debt to GDP of 200%. And even China has a Debt to GDP ratio of 120% when you include local government debt that is typically kept off the national balance sheet calculations.

Put simply, for 50+ years, ever since the world ended the Gold Standard, governments have engaged in a massive debt binge. And there is no way they can ever pay this back.

Thus, the only option, as far as policymakers are concerned, is to “print” their way out of this situation by devaluing their currencies. This is the “inflate it away” strategy for dealing with a debt crisis: by devaluing your currency you ensure that every future payment of the debt is worth less in real terms.

This process has already begun.

Globally central banks have already cut rates 123 rate times. Every major central bank (the Fed, the European Central Bank, the Bank of Japan, the Bank of England and the Swiss National Bank) is now easing monetary conditions. And it’s only a matter of time before they introduce another round of money printing/ Quantitative Easing.

This has created what I call the Great Global Melt Up: a situation in which risk assets (stocks, real estate, gold, etc.) erupt higher as investors are forced to move their capital out of cash to escape the currency devaluation.  

This process is nowhere near over. And you NEED to take advantage of it to make as much money as possible before it ends.

Why?

Because when this bubble bursts, as all bubbles do, it’s going to trigger a crisis that will make 2008 look like a picnic.So the goal for investors is to ride this bubble for as long as possible, and then get out before the whole mess comes crashing down.

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