The recent market surge, which started coincidentally with the Fed’s restart of “QE, Not QE,” is very reminiscent of the surge in asset prices we saw at the end of 1999 as the Fed flooded the system with liquidity in advance of the potential “Y2K” issues.
Since the Great Financial Crisis started in 2006, global debt has more than doubled from $125 trillion to $260 trillion.
"The median net worth of households in the middle 20% of income rose 4% in inflation-adjusted terms to $81,900 between 1989 and 2016, the latest available data. For households in the top 20%, median net worth more than doubled to $811,860. And for the top 1%, the increase was 178% to $11,206,000."
The great northern seats in Labour’s traditional heartlands – Rother Valley, Newcastle-under-Lyme, Wakefield, Bishop Auckland, Sedgefield, Bassetlaw, Grimsby and Bolsover – fell like ninepins. Yet these bourgeois liberals still do not get it. That traditional working-class labour voters are patriots who want their country back.
Short-sided analysts will argue that stocks have been in a bull market since 2009. But the reality is that from 1997 until mid-2013, stocks effectively went nowhere. If your 401K went up, it was due to contributions, not stock market returns.
Longer-term, a deeper correction remains likely, particularly as we head into 2020. If economic and earnings data don’t begin to improve markedly, as currently expected by Wall Street, the current overvaluation of asset price is going to become more problematic to justify.
"The answer is of course: It won’t be paid back. And since every debt is someone else’s asset, you can imagine what that ultimately means. A great many people are a lot less wealthy than they think. It is all phantom wealth that can disappear in an eyeblink."