Fiscal/Monetary tightening to crash global stock markets?

Posted by Peter Cooper - The Daily Reckoning

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6/02/10 Dubai, UAE – Those who decided to ‘Sell in May and go away’ have been well rewarded in the worst May for the Dow since 1940. The Dow Jones Index fell by 7.9 per cent in May and the more broadly based S&P 500 by 9.9 per cent, its worst May performance since 1962.

Is this a red light flashing danger ahead, or should investors buy on this dip? Investment gurus are all over the place. Is this a falter on the ‘Road to Recovery’ or the end of a long bear market rally?

ArabianMoney thinks fiscal and monetary tightening suggest a far bigger stock market decline is in prospect, and these things tend to happen rather suddenly, although the warning signs are always pretty clear if you care to look.

Contracting money supply

….read more HERE