The myths behind the current stock market bubble

May 20, 2021 by No Comments

Financial Times/John Hussman/5-18-2021

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“Among the strongest elements of the belief system propping up record valuations and trading debt is the notion that central bank liquidity has the capacity to support elevated valuations indefinitely. Years of intervention have cast central banks as tools of self-reinforcing speculation. Mere phrases such as ‘Fed support’ now suffice as complete investment strategies.”

USAGOLD note:  Hussman calls to question markets that are driven almost exclusively by the Federal Reserve money printing process. He references Benjamin Grahm and David Todd’s “Security Analysis” – the 1934 classic which conjures the crash of 1929.  “It was only necessary to buy ‘good’ stocks,’ they said, “regardless of price, and then to let nature take her upward course. The results of such a doctrine could not fail to be tragic.”


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