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A Speculative Bubble Keeps Inflating

Paul Samuelson famously stated that the stock market had predicted nine of the past five recessions. It’s a remark that is often repeated to mock the predictive accuracy of the stock market for the economy. Nonetheless, both move together. There were more than twenty recessions recorded by the National Bureau Of Economic Research in the past 170 years. All of ...
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Last Inning

Those who read our latest write-ups know that we have a long-term bearish outlook for the S&P 500. Extremely expensive valuations and evidence of excessive speculation among investors lead to this conclusion. Nonetheless, we have also stressed in the last few write-ups that technicals were intact and likely leading equities higher short term. Technicals Contradict Fundamentals Technical indicators remain constructive ...
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Bitcoin Bubble In Terminal Stage

Bitcoin had a stellar comeback and traded close to USD 65,000 per unit at its peak last month. There are stories of early transactions involving pizzas that were sold for a five-digit amount of the cryptocurrency around 2010. Regardless of being fact or fiction, the magnificent price increase in Bitcoin is unprecedented. An investment of just USD 100 in 2011 ...
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A Longview On Precious Metals

The precious metals complex and especially gold is fascinating many investors. Not surprisingly, some myths formed around the asset class. There is a widespread belief that precious metals are a safe haven and protect against inflation. That's true over the long run but can be costly on short- and medium-term timeframes. The crucial question is first and foremost, how did precious ...
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Debt & Inflation

Peter Bernholz, a Swiss-German economics professor, researched the causes of past hyperinflations. 25 of 29 hyperinflations in his long-term dataset were the result of government budget deficits financed by money creation. External shocks in the post-communist era triggered the remaining four. Historical evidence shows that past hyperinflations were often proceeded by multi-year budget deficits that amounted to roughly 40% of ...
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Long-Term Home Prices

The last three decades recorded remarkable returns in home prices within most OECD member countries. Nowadays, institutional and retail investors perceive housing as a safe long-term investment. However, they will be most likely disappointed over the next few decades. This write-up discusses long-term evidence that academic research revealed on home prices. It will conclude with an assessment of real estate ...
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