Throughout U.S. history, every giant financial bubble has always ended very badly, and this time around will not be any exception. Trump may get the blame for it when it bursts, but the truth is that the conditions for the coming crisis have been building for a very, very long time.
The comments above and below are excerpts from an article by Michael Snyder (TheEconomicCollapseBlog.com) which has been edited ([ ]) and abridged (…) to provide a fast & easy read.
- The U.S. dollar has been surging,
- companies are announcing that they are bringing jobs back to the U.S., and
- we are witnessing perhaps the greatest post-election stock market rally in Wall Street history. In fact, the Dow, the Nasdaq and the S&P 500 all set new all-time record highs again on Thursday.
What we are seeing is absolutely unprecedented, and many believe that the good times will continue to roll as we head into 2017….but are these stock prices justified by the fundamentals? Of course not, but during times of euphoria the fundamentals never seem to matter much. Stocks were incredibly overvalued before the election, and now they are ridiculously overvalued.
…The cyclically-adjusted price to earnings ratio has only been higher than it is today at three points in our history…the 1929 mania, the 2000 tech mania and the 2007 housing and stock bubble…and, of course, a historic stock market crash immediately followed each of those three bubbles, so, are we being set up for a huge crash in early 2017?
There are some out there that believe that this is purposely being orchestrated. For example, Mike Adams of Natural News puts forth that…
- “Right now, the U.S. stock market is surging, with the Dow leaping toward 20,000, a number rooted in fiscal insanity and delusional expectations. There are no fundamentals that support a 20,000 Dow, but fundamentals have long since ceased to matter in a financial world hyperventilating on debt fumes while hallucinating about utopian economic models that will soon prove to generate fools instead of real wealth.
- Today I’m going on the record with a prediction that I’ll offer with near absolute certainty: The rigged markets that now seem to defy gravity will be deliberately and destructively imploded under President Trump for all the obvious reasons. There will be financial chaos like we’ve never seen before: Investors leaping off tall buildings, banks declaring extended “holidays” that freeze transactions, and California pensioners slitting their wrists after they discover their promised pension funds were just vaporized by incompetent bureaucrats.”
On the other hand, there are others that believe that Trump is just walking into a very bad situation and that a crash would be inevitable no matter who was president.
History tells us that there is no possible way that stock prices can stay at this irrational level indefinitely but, for now, a wave of optimism is sweeping the nation, and many of those that are caught up in it will get seriously angry with you if you try to inject a dose of reality into the conversation.
…Let’s hope that the optimists are correct. A survey that was just taken of 600 business executives found that 62% of them were optimistic about the U.S. economy over the next 12 months. Incredibly, that number was sitting at just 38 percent the previous quarter. For the moment, business leaders seem to be quite thrilled that we have a business executive in the White House.
Hopefully Donald Trump’s business experience will translate well to his new position and it is certainly my hope that he is as successful as possible but, even during the campaign, Trump talked about how stocks were in a giant bubble, and the euphoria that we have seen since his election victory has just made that bubble even larger. Throughout U.S. history, every giant financial bubble has always ended very badly, and this time around will not be any exception.
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