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The stock market has been characterized by a decade-long complacency. The longest ever bull market in the history of the stock market has led to a curious situation in which bears are dismissed as gloomy alarmists, more or less ranked alongside wearers of tinfoil hats, astrologists and other types of conspiracy theorists. That might be the case for the moment, but that does not mean that we are wrong or that bears will be dismissed forever. By the time the current market will reach its violent end, hindsight bias – rationalizing any event after the fact – will assure that bulls await a similar fate. Whatever those short sellers from the stunning Oscar-nominated movie The Big Short knew, was something that more or less everybody knew, right? That these statements are far from the truth, can be concluded from a quick glance at the data. An overwhelming majority of retail investors suffered heavy losses in 2008. But what if we are facing an even darker scenario today than in 2008?

First: Corporations Were Never as Indebted as Today

Source: Jeffrey Gundlach

Second: Interest Rates Are Completely Out of Sync with Debt Levels

Source: Jeffrey Gundlach

Third: The Current Can Easily Shift

source: Jeffrey Gundlach

Gold Requires Patience

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