Bubble
Trouble
Monster Rally: U.S. And Japan Pumping $10 Trillion Into Asset Bubbles
William Pesek
September 23, 2020
As stocks from New York to Tokyo stage monstrous rallies, it’s important that we don’t lose sight of the creatures behind them. And how they may ultimately turn on the global economy.
Wall Street’s boom is especially eerie. What else can one say about investors yelling “buy” when the U.S. is approaching 7 million Covid-19 cases, its economy is cratering at a nearly 33% rate and the president is so obsessed with hitting China that he’s targeting apps popular with teens? Yet stocks are on a tear.
Japan’s equity upsurge also seems plenty supernatural. The economy is contracting at a 28% rate, deflation is returning and the population is shrinking at a record clip while the national debt burden, the worst by far in the developed world, swells apace. And yet the Nikkei 225 Stock Average is soaring.
The creatures behind this bull market in cognitive dissonance are the Federal Reserve and the Bank of Japan.
Both are fueling epic asset bubbles by way of their own in-house bubbles.
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Apple more valuable than the entire FTSE 100
The valuation of US tech giant Apple has continued to surge, surpassing the entire value of all the members of the UK's top share index.
Apple's shares rose 4% on Tuesday, valuing it at $2.3 trillion (£1.7tn), compared to the £1.5tn value of all the companies in the FTSE 100.
Apple shares fell back on Wednesday, but remained ahead of the London index at the close of trading on Wednesday.
It is just two weeks since Apple became the first US firm to be valued at $2tn.
DYI: When these highflying tech giants finally correct they will drop in price between 60% and 85%! The U.S. market as measured by the S&P500 will drop from 50% to as low as 85% as well. Yep, its all fun and games till someone gets hurt and those game playing central banks are setting up for a world wide economic calamity. Gold and silver may very well rally along with the flight to quality by the 30 year U.S. Treasury and Swiss 30 year Treasury bond as well. So hang onto your hats along with your gold/silver and cash better values are ahead.
DYI
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