Worst case, we are looking at a wave of sovereign defaults, a collapse of a series of government bond markets, instantaneous fiscal consolidation, deflation, and sharp decline in nominal and real GDP (over there, and I don't just mean Club Med, I mean the EU).
Given globalization, as Japan remains becalmed, China slows, and Europe tanks, it's awfully hard to be bullish on anything but US Treasuries. I really don't see how gold benefits from deflation--that is a correction waiting to happen. (We could easily see gold go below $1000.)
I see a big global selloff that will get the Dow Dow below 10,000. I felt the same way in September of 2007, but back then I believed that big rate cuts would fully offset the subprime crisis (because I didn't understand that we were facing a national secular deleveraging). This time, there is no Fed for Europe (well, there is, but it's brain dead).
So what is the bull case for global growth? I'd bet double dip 75, growth 25.
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