Stock markets are completely disconnected from reality at the moment. As tens of millions of Americans have lost their jobs and are forced to apply for unemployment benefits, the markets are rallying as if nothing has happened to our economy. Up 6% in the last month and 30%(!) since March 26th. This is completely illogical and a sign of how dysfunctional the system has become. Something that is supposed allow individuals to participate in the productivity and profitability of the companies they believe in has turned into nothing more than a manipulated joke dependent on intervention from the Federal Reserve.
I wonder how long this can go on. How long can stock markets made up of companies that rely on individuals having income to spend on their goods and services remain at these levels? Is the Fed really going to be able to keep markets elevated alone? Will we ever again see markets that genuinely reflect reality? We shall see.
If so, the expansion of the Fed's balance sheet is going to have to put 2008 to shame. We're talking multiples of the 4.5x expansion that we saw between 2009 and 2014. The current expansion is well under way.
By looking at this very unnatural chart, one has to wonder how long all of this can go on. Especially in a world in which the job market has been completely decimated beyond anything we have ever seen. You Uncle Marty has been wrong in the past about the extent to which the Fed could continue with this policy without completely destroying markets as we know them, but boy does this seems like a complete disaster in the making. Complete madness.
Luckily, Bitcoin exists and provides an alternative to this corrupt system controlled by a very select few. More and more people are beginning to wake up to this fact. Even some prominent are waking up to the value prop Bitcoin provides. I expect this trend to continue the further and further markets drift from reality. Bitcoin gives me hope we can one day return to reality.
Ready for constant 75 degree days.