Today on The Janssen Report (#102): destabilizing credit markets will likely hurt the stock markets as they are increasingly fueled by, indeed, cheap credit.

Low interest rate policies of the central banks have made it easy to make money with borrowed money, which we can derive from the incredible growth in “margin debt” as I’ll show in this video. There seems to be a clear correlation between the growth in margin debt and the growth in the overall value of the stock market. Credit is an important foundation for the strength of the equity markets right now, albeit a very very fragile one.

It should be pretty clear by now that this easy money policy by the central banks fuels mostly the asset markets but not the real economy. What happens when all this credit collapses? Strange things are happening in those markets with much more volatility signaling a growing instability.

Watch this episode of The Janssen Report here:

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Sources:

• Interview SGTreport with Bill Holter
• King World News interview with Michael Pento
• Graph of NYSE margin debt
• Overview of debt and equity markets (Goldman Sachs)
• Telegraph: 10 warning signs of a market crash in 2015
• King World News interview with Richard Russell
• Marc Faber interview on CNBC

Better exchange some of your fiat currency into stone hard assets, such as gold and silver!

Cheers,

Marco Janssen
The Janssen Report