April 17, 2018

The Real Reason Stocks Are Entering a Blow Off Top (and How to Play It)

As we noted yesterday, the summer rally has begun.

Why are we predicting a summer rally?

It’s really quite simple. Globally Central Banks have created a bubble in sovereign debt. Because this debt is the bedrock for the current fiat-based financial system, when they go into a bubble EVERYTHING gets bubbly.

This is why we coined the term “The Everything Bubble” in 2014.

However, if this bubble bursts, the governments that are issuing this debt go broke.

For this reason, Central Banks will do everything in their power to maintain this bubble, even if it means maintaining insane monetary policies during periods in which the global economy isn’t collapsing.

This has unleashed inflation... You can already see it in the bond market where the Inflation/Deflation ratio has broken out of a 10 year deflationary downtrend.

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Put another way, a truly TECTONIC shift has occurred. And it's going to produce some truly INSANE gains if you're positioned properly.

Regards.

Deo Talaverano.

Chief Market Strategist DHF.