Market Update: Melt-Up In...Everything!

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Well, folks: we’re officially in a price melt-up in nearly all asset classes.

Stocks (especially Big Tech), bonds, gold, silver, bitcoin – all are racing higher. And that’s happening on top of an already massive run-up from the March lows.

If you’re looking for a fundamentals-based rationale behind the melt-up – don’t. There isn’t one. A glance at the famous Buffet Indicator shows that markets are at a record level of over-valuation:

<img class=“aligncenter size-medium” src=“https://peakprosperity.com/wp-content/uploads/2021/09/buffettindicatorq22020.png” alt="“Buffett Indicator chart” width=“673” height=“573” />

Those cheering this white-hot rally argue that it truly is “different this time” and that the commitment of the world’s central banks and national legislatures provide a guarantee that prices will not be allowed to retrace.

This week’s Market Update video expert guest strongly disagrees. Doug Noland, 30-year veteran portfolio manager, warns that we are in the end game of the biggest financial asset price bubble in history. And like all others, it will end it tears when it bursts.

Doug is very concerned by the mind-boggling amount of non-productive credit that is building up as a result of the recent $trillions forced into the system by the Federal Reserve and Congress. It’s all mal-investment that will eventually will need to be reckoned with – and Doug sees the day of reckoning arriving very soon.

An experienced scholar of asset bubbles, Doug observes that they often rise higher than we can imagine and then double from there before bursting. He sees the current extreme melt-up as a sign we are entering the end game and urges folks to prepare for it:

Anyone interested in scheduling a free consultation and portfolio review with Mike and John and their team at New Harbor Financial can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

SCHEDULE YOUR FREE CONSULTATION

This is a companion discussion topic for the original entry at https://peakprosperity.com/market-update-melt-up-in-everything/

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Oil wasn’t mentioned but I predict a melt up in OIL as well. We broke through resistence and looks to be headed to $50 or beyond! I say beyond because we will get another stimulous, we will get a shrinking dollar and Trump will not be denied his second term, and we WILL get a vaccine, all before late Fall!!!. No way can Biden be president and why anyone would allow a truly mental case to be president is just silly. His Vice presidential candidates are being asked: “so, what are your qualifications for being president”, as everyone assumes he will NOT make it through his first term. I wish I had a choice but Biden and his faltering mental abilities scares the hell out of me.
Adam, yes, everything is as wonky as it can get but we are making cash hand over fist and it’s almost uncomfortable. I am just going to ride the wave and see where this ends without risking what I need to build our dream home and some in reserves. I do not think this year or next is going to be the time everything implodes. This feels like every year since 2008 and had I sat out I would have NOT put myself in a position to never really worry financially and I would have been sick. My gut has served me well inspite of every expert who has graced our site. This is never meant to be boastful, however, the market has been very good for those who realised it’s the only game in town. My God, this could go on a lot longer than we yet think, another 10, 20 years is a guess that isn’t outside the rhelm of possibilities. It isn’t and to say otherwise is to say the last 10 years didn’t happen when everything was suppose to fall apart every year since the Great Crash! Peace

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Did the ‘Spanish’ flu lead to the Roaring 1920’s? It could happen again. Look out for 2028!

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This time it is different because everything is digital and the central bank / ESF can support any asset it wants, via digital money printing. The only consequence is inflation which has been conveniently offset by depressionary deflation.
The crash will happen when TPTB let it happen, and not a day before or after. It seems that the precious metals may default soon which would force it. But we’ve heard that every week for 15 years. But this time it does seem different, I admit. Too bad, I was hoping for another year to get rich off the stock market.

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great video guys and i liked chris’s latest one on lock downs not really working

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Doug (12 min) opines how we are still in a “20 year bubble”. During those 20 years, I’ve held 3 different jobs, raised many children, and finally retired. Basically, this “bubble” has existed my entire working life. So: when, exactly, do markets quit being a “bubble” and become the new normal?
A solution to this paradox: 1) own one’s home, 2) keep 10% of NW in physical PM, 3) live (and invest) as if there is no bubble. If the theoretical bubble does pop? One’s 10% PM becomes 100% overnight and NW stays steady. If it never pops, profit from said “bubble”. Worked for me.

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I really liked the slide you had at 6:48, how the billonares are making a fortune during the pandemic. Buffet is making a killing in the stock market right now, so he is clearly not following his own Indicator.
Rather, he invests in the market and either hedges or uses stop-losses to protect himself.
Look, the game is rigged. But nothing prevents us peons from tagging along and cashing in on this outrageous wealth transfer from us to them. If one has some sort of moral dilemma about doing so, just take your winnings and give to charity. But using stop-losses on blue-chip dividend-paying stocks, there really is minimal risk.

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I hesitate to keep commenting on this interview, but it’s got so much good stuff I could go on for days. Adam you are like a jeweler, slowly chiseling a diamond in the rough, extracting insights from Doug on a myriad of subjects. No matter where viewer is coming from, there is simply a lot of red meat here. I’m watching it over and over.
One insightful comment from Doug: no matter what, if (when?) the Fed fails to hold up this “everything” bubble, the downturn/unwinding is likely gonna be a very long process (decades to build a bubble may take decades to deflate), and people will have a hard time understanding this. I concur; one would be wise to study business and investing today, before the downturn, because when things get ugly, knowing when/how to invest is gonna be challenging.

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While past performance is no guarantee of future results…
this is what New Harbor has done for me lately: