A number of analysts whom we admire and respect – Jeremy Grantham and Richard Russell, for example – have come to believe that we are on the threshold of an even greater bull market.
We have noticed how one bubble has led to another…in stocks…in real estate…in art…in watches and collectibles…in one market…then in another…until the whole financial world is expanding at an alarming rate. We read in the paper just yesterday that the celebrated art promoter Damien Hirst has created a diamond-encrusted skull now apparently offered for sale at US$100 million. Pity the poor dope who buys it! But what do we know? It will probably go up! And now you can buy stocks in China for 40 times earnings…and houses priced over US$100 million too.
We have noticed also how reckless spending, borrowing and money printing in the United States now leads to reckless investing, borrowing and money printing in other countries, as each central bank tries to keep its own currency from going down faster than the dollar…and how the financial industry has invented new ways to increase liquidity and leverage, effectively reducing central bankers’ control over the marketplace.
And now it seems that the whole world is enjoying a Super Bubble…unlike anything ever seen before. It really is a New Era, in other words. How big will it get? How long will it last? We wish we could tell you…
Everyday is a new day…and every day is just like the one before. Every market is completely new…and not so different from ones that came before. Every generation prepares the way for the next one.
Markets and Money