Stealth ‘default’ via inflation and the control of internal interest rates is the world’s long-term solution for its ongoing economic woes, argues Clem Chambers, CEO of global stocks and shares information site ADVFN.com and author of financial titles including ‘A Beginner’s Guide to Value Investing’.Right on cue, the ‘summer slump’ observed in world markets in recent years looks to be on its way again.This is good news for long-term investors. It means they need only wait for the right time to ‘buy the dip’.This year’s dip will be huge and long-lasting. So there’s no need for investors to get all hyperactive.A sensible investor need only pile his or her cash up until the big decline, then wait a few weeks and buy the stocks they’ve been researching.The following rally will deliver a nice return.Remember, it’s difficult to ‘get out’ before a slump and equally difficult to re-enter the market with perfect timing. Catching the bottom is much easier that pre-empting the top.The market likes to throw a ‘W’ shaped bottom during these so-called summer slumps. For that matter, a ‘W’ bottom of one sort or another is standard chart form.As such, an investor can hang around waiting for quite some time to establish when a true bottom has been reached, or, at least when the initial slump is over. All investors should take a look at the long-term charts of indices to get a feel of what a slump looks like — and what the bottom looks like, too.Buying good stocks cheap is the key to successful investment in equities. Good stocks go down along with the rubbish ones when there is a general market ‘slump’. This provides great buying opportunities to add to a portfolio.Only if the most dire of crises is on the horizon should one consider selling.That dire crisis would appear to be, of course, the long-running credit crunch and recession which now finds its front lines in Europe.Yet the crisis is actually over, even though it might seem hard to believe. Only a new president in France has the power to set it off again and it seems very unlikely that the new president, Francois Hollande, will do anything that radical.The euro crisis is over because the mechanisms for financial repression — budget deficit support, and trade deficit amelioration — are in place, and at work. The European Central Bank (ECB) provides infinite credit to banks, who lend it on to governments, who ‘stimulate’ via budget deficits.This rescues government debt, government budgets, bank liquidity and solvency — the sum total of the market-driven problems pushing the Euro into the abyss.Q. What are the downsides?A. A weakening Euro and inflation.The euro has been too strong for some time so there remains plenty of room for more money-printing. Then there is inflation. Inflation is just the remedy to melt all those state debts away.The populace of Europe has voted against austerity. They will not have it. Europe is socialised and the people have no problem with inflation gnawing at their society. They are much more worried about the potential loss of their entitlements today than the effects of their countries’ slow economic death through inflation and poor economic management.Now the solution is in place, there is little risk of weak countries falling out of the single currency — a scenario which would result in a euro viewed in a similar way to the D-mark — so, the euro remains free to fall as it becomes more like the lira, Drachma and Peseta.Now the battle must move on. As a commentator on these matters, it is obvious that the transit of this crisis goes from Spain, to France, to the US.In my mind, this should happen fast. It won’t.Things take time in economics. Impossible positions can be maintained for years, so that the current crisis will not burn through France and on to America like a bush fire — it will instead take years.There will be more euro problems. A falling euro will cause consternation. Inflation will cause the gnashing of teeth, but that won’t be the same as a crisis of default and economic implosion. France will have a bumpy time as the new regime will unlikely do anything to reverse the French malaise of stultifying stateism.The question is, when will the blaze hit the US?The country will hit its new debt ceiling soon enough and that will make for electioneering fireworks. However, it doesn’t seem that Romney can win. The US seems to have no way to stop digging a yet bigger pile of debt. With US debt now over 100 percent of GDP and growing at more than six percent a year there will need to be radical action soon enough.The early signs of this will be rising interest rates. When interest rates in the US start to rise, as they must, this will be the starting pistol report that the next leg of the crisis has begun.In a free market, that time would have already have come, but in a world of ‘controlled’ markets it may be some time yet before it begins.We can all live in hope a Euro-style crisis will never happen to America. However, unless there are trade and budgetary improvements, this will be inescapable.For now, for both Europe and the US, the long-term solution to their problems will be stealth default via inflation and the control of internal interest rates. This hidden tax will drain economies dry. At the end of the process, the rich and poor worlds will be indistinguishable.As such, perhaps that won’t be such a bad thing.Visit www.advfn.com for free, real time stock prices.Contact Clem on Twitter : @ClemChambers or visit www.clemchambers.com for all Clem’s latest news and information on his financial titles series of thriller novels, including ‘Kusanagi’ and ‘The Armageddon Trade’.