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Christine Hughes, of Otterwood Capital Management says the driver of equity markets has been quantitative easing by the US Federal Reserve. This approach is hugely beneficial to the banksters, and as a result, the financial markets, but does nothing for job creation. Even with a new Fed. Chairperson, she expects more of the same next year, despite rumours of the Fed. withdrawing stimulus.
Not so for Japan. She feels it is only a matter of time until Japan defaults on its huge government debt. Because government bonds in Japan are owned mostly by the Japanese, she sees the affect of a default being even worse than would normally be the case. In the case of a world-wide liquidity event (banksters unwilling to lend to other banksters) she says there will be no government bail-out next time.
It isn't all bad news, however. At least for next year, she sees as much as a thirty percent return on US equity markets next year. Just don't confuse that with the beginning of a long term bull market (no matter what those selling financial products are going to say). My father always told me, "The bigger they are; the harder they fall!"
What do you think, much higher, or much lower from here?