Crash Alert: Priced for Perfection in an Imperfect World
The last few US inflation reports have been ominous, with the general trend morphing from sharp decline to gradual increase. Here’s the Core Services index, which is now rising at a 4% annual rate:
Stocks, meanwhile, are priced for perfection, with the second highest price/earnings ratio on record:
Investors are getting cocky, as evidenced by the soaring popularity of leveraged ETFs:
And gold has shaken off its post-election correction and is now threatening its all-time-high:
Can the Fed keep easing into all this?
Today’s stock market enthusiasm is based in part on the expectation of ever-easier money for the balance of the decade. But can the Fed really deliver this in the face of soaring financial assets, off-the-charts speculation, and rising general inflation? Wouldn’t that spike inflation? Probably. So at some point in 2025 the Fed will have to stop lowering rates.
What happens then? Well, check the above P/E chart for what became of the last few priced-for-perfection markets.
if the World goes Nuclear as some think it could do.......Martin Armstrong and Scott Ritter................then none of us will have to worry what the Stock Market does........
so at this point in time i think what we really have to be concerned about is that Martin Armstrong and Scott Ritter are wrong in their assumptions and the Deep State comes to their Senses and quit provoking Russia............
if the World goes Nuclear................the Stock Market will not matter to anyone.......
let us Pray that ...that Scenario never happens
ABSOLUTE FINANCIAL INSANITY!
Monetary Debasement is the Macro policies of the not independent FED and drunk as sailors US Treasury fiscal management.
WE are swimming in the sewer buying every soaring Risk On Asset because holding rapidly, almost worthless, base currency will destroy all future purchasing power...borrow at any interest rate because the principal repayment will effectively be discounted 30%...Weimar Republic redux?
Here in our outside of SF Town a 25 unit new condo development just came onto the market = Average 1600 sq ft, covered parking, no pool, no fitness facility = $2,000,000, $900 monthly HOA & $25K property taxes BEFORE YOU BUY 30% INFLATED GROCERIES!
Yes a "Perfect" Category 5 Storm!