Capital markets have been full of flummery over the last several years. This has included an enthusiastic chorus of analysts and experts that repeatedly shower investors with flattering tales of sustained economic growth and promises of a new era of prolonged prosperity in the wake of the financial crisis that erupted so many years ago now. But like Mr. Fox and many others investors that are more skeptical about the current state of the global economy and its capital markets, I am much more inclined toward a good balance sheet at the sovereign, corporate and household level. I am also inclined toward things that make rational sense. And after searching throughout history, I have yet to discover an example of a major society that defeated a financial crisis caused from too much debt by undertaking even more debt and debauching their currency. But such is the environment in which we are operating today. And it has resulted in some nonsensical disconnects that have the potential to resolve in a very painful way for some investors once reality finally returns.
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