Economist John Hussman cuts to the chase in this nails-hard analysis of a bull market that has been fueled mainly by distortions of fact. The title of his essay is Three Delusions: Paper Wealth, a Booming Economy, and Bitcoin, and it is a must-read for anyone who believes stocks have reached, to recall Prof. Irving Fisher’s immortal words, a permanently high plateau. Hussman says there has not yet been sufficient deterioration in the stock market’s ‘internals’ to sound the alarm, but that we are getting close.
Bull-Market Delusions
- December 26, 2017, 10:17 pm
As the Central Banks of the world continue to buy up stocks and bonds, they are relentlessly taking all of the world wealth private.
When they have accomplished that, it will not matter what Old Time Currency they use to count their billions. They will own outright everything worth owning.
A big reset of prices accompanied by a return to a gold or whatever backed currency will not happen.
TARP proved that fact, 90% of the plebs opposed it, Congress rubber stamped it anyway.
Many rust belt cities have all ready gone Mad Max.
Next entire States will fail.
Illinois, Connecticut, and New Jersey come to mind.
When this happened to Imperial Rome at it’s sad end, they simply passed a law that you could not flee to the back woods, you had to stay and pay your taxes or have your property confiscated.
And they would not accept their own debased currency, you paid in bullion, or wheat, copper ingots, or whatever!
At some point, there will be a series of Civil Wars a la Marius, Sulla, Crassus, Pompey, Caesar, Mark Antony, Octavian, etc.
Or a 90 minutes thermonuclear exchange between India, Pakistan, Russia, China, and Uncle Sam.
And so, you see, these are the Good Old Days!