The Coming Rout

Blogger Chris Martenson, a deep-thinking writer by most any standard, had some interesting things to say about what he sees as a coming rout in the commodities and stock and bond markets, especially between the months of May and September. Here are two excerpts from his commentary:

There’s a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%.  The trigger will be the cessation of QE II and a multi-month pause before QE III…

The basic idea is this:  The Fed has been dumping roughly $4 billion of thin-air money into the US markets each trading day since November 2010.  The markets, all of them, are higher than they would be without this money.  $4 billion per trading day is an enormous amount of money.  It’s gigantic by historical standards.  As soon as the QE program ends, the markets will have to subsist on a lot less money and liquidity, and the result is almost perfectly predictable.

Go and have a read: Chris Martenson.  This is part I of his column; part II will follow in the near future.