The US debt as a percentage of GDP has been falling since the 2007-2008 financial crisis, marking a long-term deleveraging phase. Despite efforts by the Federal Reserve's Bernanke, the US has not yet seen a re-leveraging of debt. This trend signals lower economic growth and weaker consumption as US consumers increase savings and face structural unemployment. US Treasury bonds have rallied strongly, signaling a slowdown in nominal GDP growth and rising deflation concerns. Inflation in the US is expected to drop and possibly turn negative by October, which could prompt further quantitative easing. Europe faces systemic risks due to government debt in countries like Greece, Ireland, Portugal, and Spain. The European Central Bank has reduced its purchase of risky government bonds, increasing market uncertainty. Fiscal austerity measures in Europe are deflationary and politically challenging. Spain is a key country to watch, with high unemployment and a massive housing bust. In contrast, Asia shows a positive growth story. Asian markets, excluding Japan, continue to outperform the world with strong economic fundamentals. China’s market is policy-driven and expected to bounce back as easing measures begin. India's robust credit growth is focused on infrastructure loans, raising hopes for sustained growth above 9%. Inflation in India is expected to ease, while monetary tightening continues cautiously. Investors are shifting portfolios, increasing exposure to Asia, especially India and China, while underweighting Australia and commodity-linked sectors. Gold remains a key hedge, with predictions that prices could reach $35,000 per ounce in a future bull run linked to renewed US quantitative easing. Hong Kong’s property market illustrates Asia’s asset inflation story due to limited housing supply and low mortgage rates. Meanwhile, Indian consumer demand is growing steadily, supported by easing measures. The US and global markets are at a crossroads between deflationary signals from bonds and contrasting optimism in stocks. The next major market movements may depend on how Europe handles its debt crisis and how monetary policies evolve in the US and Asia. Investors are advised to watch bond trends, inflation data, and fiscal policies closely as key indicators of the economic future.