Also important was government consensus across the political, geographic and economic spectrum for fashioning smaller government and deficits. While the early 1990s had U.S. savings and loan and Latin American debt crises, solvency and liquidity of banking was a lesser issue in total. Today, deleveraging balance sheets is again at core but now for the financial sector and advanced countries. Notwithstanding the China growth justification for euphoria that overlooks that the Shanghai index ( currently 2698) is well below its cycle peak on August 4, 2009 of 3,471, markets are likely in trading ranges like 1100-1200 for the S&P 500 and MSCI World index (currently 1160 and 1125 respectively). Irrespective of industry sector, generation of free cash flow is a core portfolio characteristic to aspire for. Given the risk in the advanced country bloc of expanding dysfunctional politics and central bank propensity to inject liquidity over fostering restructuring, gold bullion and precious metals remain hedges.
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