Most individuals who comment on this topic, work on the assumption that the credit system will continue operating as it has for the last few decades, and that corporate earnings will not fall to a great extent.
I view the situation differently.
The growth in the equity and property markets over the last couple of decades has been driven by easy credit more than any other reason.
The growth in M3 via the multiplier effects of the banking system have been the major contributor.
I'm working n the assumption that the levels to which individuals have used leverage, is such that a significant correction in leveraged asset such as share and property will not rsult in a minor correction, but rather the start of mass liquidation, debt defaults... which i forsee leading to contraction to M3 goign forward.
This is a very unconventional view to hold among the generation of bulls who have had their veins washed with the easy money of a super bull market... but it's the outcome i hold as being most likely to occur.
Even if my views in 10 years time from now are proven to have been too extreme, and thus incorrect to some extent, i still believe that an individual acting on my scenario will be better of financially than one invested in equities and property going forward.
