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Fed Tightening Cycles Coincide with Bursting of Asset Bubbles: How to Play It

by Mike ‘Mish’ Shedlock
MishTalk

Fed tightening has been a reliable catalyst for the bursting of asset bubbles globally, says Crescat Capital.

Crescat Capital’s First Quarter Review suggests now is a good time to be short equities and long gold.

While many global equity markets have bounced off their February and March lows, we strongly believe it’s a bull trap. We think February was only the beginning of a bear market that has much more to play out in our favor on the short side.

The almost-certain biggest asset bubble in the world today, the rhino in the room, is the Chinese credit market, and the yuan by extension. The US stock market is also in an historic valuation bubble. We have thoroughly documented the extent of these bubbles in our past several quarterly letters.

Continue Reading at TheMaven.net…

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