Food for thought

Is this what's coming?

"Imagine a situation in which inflation has reappeared, and the Fed and other monetary authorities have been forced to tighten interest rates to fight inflation. The prices of government bonds will decline, to take account of new higher yields. Some countries and highly leveraged companies will get into difficulties, forcing a further write-down of their debt obligations. Commodities prices will decline, as the cost of holding inventory will have substantially increased and there will no longer be the chance to speculate at very low financing cost. And finally, global stock markets will decline sharply, both because corporate earnings will be adversely affected by the new higher financing costs (the rise in US corporate earnings in the past decade has itself been a bubble) and because rising bond yields will deflate mechanical valuation models, thereby reducing price-earnings ratios."