We all know leverage and debt are helping to push the markets higher almost every week. This post shows the extent to which it is happening. If margin debt drops for one month, so do the markets. However when it picks back up we see the market parallel the move. Here is a chart used to drive that picture home.
While I obviously do not think this can continue forever, policy makers have shown no intention of slowing the issuing of further debt to “help the economy”. This is one of a number of reasons that I continue to believe something significant will have to happen to the US dollar before a major correction occurs.