US debt crisis will push stocks to new lows, says historian

The American stockmarkets will dive lower than during the financial crisis when the boom in American government debt comes to an end, the author of Anatomy of the Bearhas said.

In an interview with the Financial Times, Russell Napier, the financial historian and strategist at CLSA, the broker, says the S&P 500 index of large companies could hit a low of 400, lower than the 666 reached in March 2009.

According to Napier, emerging markets have propped up the world’s supply of money since the crisis, including to the American government. However, this massive injection has led to inflation and will cause the developing world to tighten its monetary policy further.