Ted’s essays

what a bubble looks like

The graph below is a great picture of a bubble that should have burst a long time ago… but it keeps holding together and making the eventual crash much, much worse.

King World News published it in a very good article:
DANGER: The Global Collapse Is Now Accelerating

To appreciate the chart, first understand the red bars. Other than the little blips of green, this is showing investors OWING money on stocks they have “purchased”. The stock prices and all indices of them are inflated by credit, debt.

Once upon a time, people INVESTED money in stock. Storing your SAVED money in stocks was riskier than storing your savings in a bank, but it potentially earned more. In either case, saved money was loaned by banks or directly by investors to build, expand, grow and make the world around us more developed and productive.

Currently, central banksters of the world like The Feral Reserve, constantly push more money into the economy, AND force a zero interest rate on borrowed money.

Where does it go?
You see it in red.

stock market bubble

Okay. Once you understand the red/green show 😉 look at the blue line. This is the value measured by one index, the S&P 500.

beater carOther indices tell the same story. Stocks are valued WAY HIGHER than the business assets they are supposed to represent. That is like saying your classic car is worth a hundred thousand dollars, and borrowing money using the automobile title as collateral. Sure, there is value to a functioning car, but nowhere near that market valuation.

Professional investors used to live, breathe and talk about Price/Earnings ratios. How much did a stock cost compared to what the company you were investing in earned. Now simpletons and gamblers rule the market. The only question they have is, “How likely is it someone will come along willing to buy the stock for as much or more than I paid for it?”

The answer, when central banksters pour money out of helicopters, is “Very likely”.the emperor has no clothes

Until some little kid shouts, “The emperor is wearing no clothes!”

Suddenly the EXITs aren’t big enough. People get trampled. Illusions of wealth turn to junk.

Now look again at the blue line. It enters the picture on the left, shortly after the dollar was disconnected from being exchanged for silver or gold. That is, before this world of fiat currencies became unhinged. (To appropriate and pun on a term economists often use when a currency is connected to a secondary measure)

THAT, folks, that blue line in 1980, is close to the real value of S&P’s selected top 500 companies. Around a hundred bucks. The rest is vapor.

For every two thousand dollars in the stock market, a hundred of them are real.

The final thing I want to point out is the timing of the over-inflated bubbles. As the money printing got going, tech stocks were all the rage. It seemed nobody could lose buying anything related to home computers… until *POOF* they did. An S&P index of 1500 became 800.

Borrowed money disappeared from the market (it then reappeared in the real estate market). A lot of people owed a lot of money on stuff that found its value at a much lower level than they had thought.

The next time credit inflated the market was followed by what the investment community calls “The Crash of 2008”. Many thought it was The Big One. But money came pouring out of the central banksters to prop it back up. They weren’t ready to let it go down yet.

But NOW. Oh my! When it heads down this time, the speed will be impressive. Roll this plane over. Point it straight down. Kick in the afterburners.

I sure hope you aren’t counting on any “investments” when the little kid shouts.

I encourage you to now go read the report that included the chart:
DANGER: The Global Collapse Is Now Accelerating