Risk of Depression Low……

Posted by Mario Cavolo via Rick Ackerman

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Rick’s Picks frequently runs guest commentaries expressing opinions that differ markedly from our own. Below, Mario Cavolo, an expatriate who lives in China, argues that there is no global, deflationary depression bearing down on us, but rather a muddle-along economy with strong spots as well as weak ones. We disagree and see a period of economic darkness more severe and widespread than any in history. Our bottom line, very simply, is that the world is unwinding a financial asset bubble with a notional value of nearly a quintillion (i.e., $1,000,000,000,000,000) dollars. Considering the sum involved, there can be no easy return to economic health. More logical is that a totally corrupt global financial system will have to be destroyed before we can rebuild the economy on honest trade. As things stand, the world’s financial-products-and-services balance sheet is at least ten times as large as the ledger for trade in real goods and services.

Mario notes optimistically that Japan has muddled through its decades-long deflationary recession without experiencing social disintegration. Although this is true, we would argue that it is so only because Japan had the rest of the world – including an insatiable U.S. consumer – to keep its powerful export machinery humming.  But who will bail out the U.S. and Europe as we continue to sink together? We could take on Mario’s arguments point by point here, but we’lll let that happen in the Rick’s Picks forum, which has attracted a very intelligent and articulate following.  RA

Mario Cavolo: It is easy to continue feeling humbled and confused by the sentimental and fundamental dance of the world’s asset classes and regions, be they equities, currencies, commodities, or that shiny stuff; feel free to pick your basket of market sectors to analyze and track.  DaBoyz is a moniker here at Rick’s advisory website, typically referring to the big time market players, institutional investors, bank/investment house trading desks and other various neo-elitists who have literally taken over the world’s free markets.  Planet Hollywood was a great brand name idea. Today, so is Planet Las Vegas or Planet Macau.


The singular “George Soros who made billions shorting the British pound” example has become a cancerous plurality on the daily tape in a high stakes global trading playground. It is indeed real, a separate “sector” of reality, while the rest of reality — the real reality of the real world — goes on day by day, dealing with the damage trickling down. As might be suspected as the new

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