The Everything Bubble

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In this video, I discuss the "Everything Bubble," in which all asset prices (stocks, bonds, real estate, Bitcoin) are trading at high valuations and do not seem to be able to correct.

The current stock market bubble is quite different from the bubble peaks in 2000 and 2007. The US fiscal situation was much better back then, interest rates were higher (hence more room for implementing an easy money policy), and the sovereign debt situation was not nearly as bad.

Government bond debt levels are now so high that there are only two ways out: fiscal austerity (debt defaults, defaulting on paying retirement benefits, which is politically infeasible and too deflationary) or currency devaluation/money printing.

I believe that the latter policy path has already been chosen. The Fed will keep interest rates below the rate of inflation, and allow inflation to run hotter than normal over the coming decade.

Holding a large allocation to cash or bonds will result in a huge loss of purchasing power for investors. The only safe path is to hold significant amounts of stocks, real estate, and Bitcoin, all of which will continue to move up in price as the US dollar is devalued through excessive money printing.

US government debts will be paid off using devalued dollars. In the process, asset prices denominated in dollars will continue to appreciate, and the US dollar will probably lose its world reserve currency status to China or Bitcoin.

Bitcoin is the best life raft around. It is an excellent store of value, and may also be used to evade high taxes and capital controls. Please do not do anything that is illegal in your jurisdiction.

Not investment advice! Consult a financial advisor.

Part 1:
https://www.youtube.com/watch?v=1L2KkVPST0c&ab_channel=TraderUniversity

Part 2:
https://www.youtube.com/watch?v=j2UMYx_EE34&ab_channel=TraderUniversity

Stocks and Weimar Germany hyperinflation:
https://www.businessinsider.com/heres-what-happened-to-stocks-during-the-german-hyperinflation-2011-11

10-year Treasury yields historical chart:
https://fred.stlouisfed.org/series/DGS10

Real estate prices continue to go straight up:
https://www.zillow.com/los-angeles-ca/home-values/
https://www.zillow.com/seattle-wa/home-values/
https://www.zillow.com/denver-co/home-values/

Historical chart of S&P 500 PE ratio:
https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart

Bearish WSJ op-eds:
https://www.wsj.com/articles/when-investors-forget-fundamentals-the-market-is-broken-11611055800
https://www.wsj.com/articles/when-the-stock-boom-turns-to-bust-11615144869

Watch the Fed's balance sheet grow:
https://fred.stlouisfed.org/series/WALCL

Wealthy use real estate as store of value:
https://www.nytimes.com/2017/07/21/upshot/when-the-empty-apartment-next-door-is-owned-by-an-oligarch.html

Zimbabwe stock market chart:
https://tradingeconomics.com/zimbabwe/stock-market

Venezuela stock market chart:
https://tradingeconomics.com/venezuela/stock-market

Ray Dalio on currencies:
https://twitter.com/RayDalio/status/1371887244643082247

Reserve currency status does not last forever:
https://azizonomics.files.wordpress.com/2012/01/20120103_jpm_reserve.png

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https://www.amazon.com/Beginners-Guide-Stock-Market-Everything-ebook/dp/B07S31TBF5

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos.

My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

#Stocks
#HousingMarket
#Bubbles

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Видео The Everything Bubble канала Trader University