"If I understand your analysis correctly, you do not worry too much about equity market because le interest rates are very low, and a bear market does not occur when the rates are that low.

"OK, but I wonder if what the markets are seeing right now is a globalized deflation, spurred by deleveraging everywhere and austerity measures in europe and China. In this case of a deflationist spiral, couldn't we see a major downturn with very low rates?"

David Fuller's view I do worry because we live in very unusual and challenging times. However I think most stock markets and certainly Fullermoney themes are extremely unlikely to revisit their depression-discounting lows of 4Q 2008 and 1Q 2009.

I might possibly feel differently if all countries faced the OECD nations' problems. However many companies have demonstrated their ability to cut costs, modernise and remain profitable in a slow-growth environment. There is a real fear of deflation in the markets today but we have also seen that all governments intend to counter this by erring on the side of future inflation in terms of monetary policy. Most importantly, Asian and resources-led emerging markets mostly avoided recession in 2008-2009 and have experienced strong GDP growth more recently. That will probably slow somewhat but a "deflationist spiral"? I doubt it and maintain that we will continue to see pockets of both deflation and inflation.