Here is another extract from the same article by Puru Saxena...

Here is another extract from the same article by Puru Saxena (www.purusaxena.com):

"It is interesting to note that Professor Nouriel Roubini (who correctly forecasted the extent of this economic slowdown) was recently interviewed by the Financial Times. During the interview he stated, "We are going to avoid the Great Depression and a severe recession even if there is a risk of protracted slow economic growth".

If Professor Roubini is correct about the economy, then I suspect global equity and commodity markets will see explosive moves from the current levels. We must remember that the investment community is manic-depressive and most participants have already factored in a gut-wrenching economic recession or worse. So, if the current recession does not morph into the widely expected prolonged depression, investors will have to re-think their investment strategy and this will be the catalyst for a powerful rally. Given the dismal yield available in cash and government bonds, when investors search for higher yields, capital will flow towards the beaten down equity and commodity markets. At the same time, US Treasuries will witness a spectacular crash. Figure 1 shows the astonishing decline in the yield available on 3-month US Treasury Bills."