Aftershock: Protect Yourself and Profit in the Next Global Financial Meltdown, 3rd Edition

CHAPTER6

Phase 2: The Aftershock

POP GO THE DOLLAR AND GOVERNMENT DEBT BUBBLES

Most people will be caught completely unprepared for the Market Cliff and rising inflation we described in the previous two chapters. Such conditions are not expected in a typical market “down cycle” or recession. When it occurs, most Americans will naturally assume that the situation cannot possibly get much worse. Unfortunately, it will.

As stocks and bonds fall sharply in the Market Cliff, the rest of America's bubble economy will also begin to pop. The full bursting of the stock market, real estate, private debt, and discretionary spending bubbles will rock the U.S. and global economies, forcing us to pump up even further our two remaining vulnerable bubbles, the dollar bubble and the government debt bubble. When those last two bubbles finally pop, the full Aftershock will begin.

It won't be hard to convince you that we have an enormous government debt bubble, so we'll get back to that in a few pages. Right now, we'd like you to keep an open mind and consider the possibility that we have a vulnerable dollar bubble. We know this is hard to believe. All we ask is that you read on a bit more before coming to your own reasonable conclusions. If we are right (and based on our books dating back to 2006, we have an excellent track record), you cannot afford to ignore this. We know it feels fundamentally wrong, but please let icy cold logic be your guide.

The Dollar Bubble: Hard to See without Bubble-Vision ...