Part 10/16:
The experts observe that in response to crises, authorities inject massive liquidity—similar to the response during the COVID pandemic—that temporarily inflates equity markets, creating a "V-shaped recovery" fueled by debt-fueled stimulus. However, Preston warns that such measures are akin to a drug—they mask the cracks but only deepen systemic fragility.
They predict that economic downturns will trigger massive selloffs in stocks and bonds, with market valuations collapsing just before governments attempt to flood the system with liquidity again. This cyclical manipulation, combined with massively leveraged trading strategies, makes the markets fragile and prone to catastrophic shocks.