by Mish

Berg’s view is on a 30-year bear market is on a “real inflation-adjusted basis, not a nominal basis”.

This is the “most over-valued equity market in history, worldwide” …. not even a Mario Draghi “whatever it takes” action will help.

“It’s all one big worldwide bubble.”

I especially like Berg’s admission that he does not know how this ends.

“Either deflation is going to accelerate, which is most likely, or they [central banks] will turn to real inflation, real printing, rather than just credit inflation. Either way it’s disastrous.”

That has been precisely my view for some time.

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I too, expect another round of credit-based deflation but I am willing to change my mind if something different happens.

Berg finishes with a bang: “The whole idea you buy stocks and hold them for 30 years was never correct. … The typical investor should be out of stocks and out of bonds and wait for a crisis, and buy during a crisis.”

Not sure when the bond bubble bursts. Stocks are on the cusp now.

But as I have stated, there may not be a crash that many bears now expect.

My favored scenario is a series of five to fifteen percent declines over a number of years, with smaller and less frequent rallies, where every rally is a trap.

Such a slow bleed would be far more painful to pension plans counting on eight percent annualized returns.

This is one of the best Bloomberg interviews I have seen in a long time, but I am a bit biased. I would have said nearly the same thing.

Mike “Mish” Shedlock

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