In the wake of the Great Recession the most powerful crisis since the Great Depression, a powerful negative multiplier descended upon the developed world. Unlike other recessions the Great recession forced a massive deleveraging of consumers and businesses, which inflicted high unemployment and stagnant wage growth. Five years into the recovery consumer and business spending remains weak. The deleveraging and weak spending has forced governments to increase deficit spending to prevent a repeat recession. Now governments are beginning their own deleveraging process. The resulting government austerity has only exacerbated the vicious economic cycle of low growth, high deficits along with an uncertain consumer and business environment. Ironically our financial markets which were the cause of the Great Recession have been the only part of the economy to benefit from the unprecedented level of accommodative monetary policy of governments worldwide. Over the past five years, the global stock of dollars, euros and yen has risen 21%, even as nominal GDP grew only 10% over the same period. The global monetary base has expanded by a remarkable 150%! The effects of these actions are readily apparent. Banks and financial intermediaries have made loans only to those entities that don't need the money. While at the same time they engage in balance sheet reshuffling stock repurchase and cash hoarding. Consumers aware of the massive government attempts to right the ship has for the most part decided to hold on to their discretionary money. As previously stated the area that has benefited from the lax monetary policies is the financial markets. Thanks to the flood of money firms of all sizes and stripes have made stock repurchases and stock market investments all the rage. The market is now at levels not seen since the Great Recession which has prompted some commentators to declare we have created a new market bubble. The question on everyone's mind is where we are going from here. One thing is for sure bonds are going nowhere as the US Fed ramps up its tapering program we will see yields on intermediate and long term bonds rise and rise. The bright spot is housing which has finally stabilized and begun to show signs of growth if this continues and consumers start to spend again all will be well. However don't count on it. When governments start trying to make things better they often times make things worse. I predict this will be the case even though it will take a long time before people see the effects. For now I predict more sluggish growth for global economies with US growth to be better than the rest thanks to the continuing oil boom.