“This Only Ends When The Bond Market Pukes”

We all get it wrong, including Bass, Yusko, Icahn, Dalio, and [insert whatever guru you want in here].
So when you take solace in the fact the stock market is running higher without you, I would be weary of consoling yourself that you are in smart company.
Now please don’t mistake my unwillingness to join the chorus of those warning about the dangers ahead as my belief that everything is rosy. I understand the arguments about the huge imbalances in the financial system. I don’t need a lecture about the unsustainability of the current environment. I get it, we are screwed. We have made too many promises, have not saved enough and have created a can’t win financial situation.
Yet why is everyone so sure it will end in a deflationary bust? I hear all these gurus talking about the optionality of cash. Yeah, I understand. If you hold cash when prices collapse, you are able to buy when everyone else is selling. You listen to these hedge fund managers tell the story, and it sounds so compelling. It makes you want to sell everything, sit back and wait for the inevitable collapse.

This post was published at Zero Hedge on Jun 5, 2017.