Will the "bubble" pop?

When you say his got the timing wrong, what do you mean??

 

Well, I don't think it's the biggest bubble of all time yet. As I mentioned, the Dow was in a bigger bubble during the internet boom in 2000.

You could make an argument that 2000 was just a stock market bubble, and 2008 was a real estate bubble, but this is an "everything bubble". But I just don't think the crash is imminent, and I think that over inflated asset prices caused by irresponsible global monetary policy has longer to run.

In fairness, picking timing is impossible, which is why I say that he is generally pointing in the right direction.

 

Something has to give, its not sustainable. I need a crystal ball

 

Well, every corrupt ruling class has tried to create wealth by printing currency units. It has been going on forever, but it is relatively new in the West. In any event, wealth can only come from being productive - ie combining land labour and capital to create things.

When central banks intervene to create debt, they are not creating any wealth (in fact, low interest rates make wealth creation more difficult because it deprives the economy of savings) but it does create inflation.

This inflationary bust must come, but we just don't know when. In the meantime, as investors, we just want to be in inflation hedges, and tangible stores of wealth to ride out the madness.

My personal perspective on the "when" question is: watch the crude oil price. It has gone from $0 per barrel to $73 per barrel in one year. My hunch, is that when crude gets to USD$200, that will be a flashing signal for the top of inflationary crack up bust cycle, a signal for an impending crash. But that's just me guessing.

 

Why is crude oil the impetus for this??

 

I'd lend you mine but it is broken.

I've given up trying to predict anything....

 

Imho 'predicting' is a fools errand.

All you can do is manage risk for possible benefits. That's it.

 

Over 20 years of investing I have never seen a market like this.

Even our government was calling a recession.

I would hate to be a FHB in this market, not saying its impossible to get in …..but its a tough gig.

 

imho, 2008 was scarier in terms of the financial markets. Banks were scared of each other.

In 2020 governments around the world provided support quickly and confidence in the financial markets didn't collapse (this is different from the share market dropping). While the development of the virus was unknown, the danger of financial collapse was quickly taken off the table.

We would likely have had another Depression, or worse, if governments hadn't supported the markets. But they did.

 

I am pretty sure banks abolished low doc/no docs during this period ….. many got burnt during this period as they were dependent on these loans to complete projects.

 

Well, crude was the canary in the coal mine back in 2008, when we last had an inflationary blow off top. Crude got to USD$150 marking the top of the cycle and has crashed and never recovered since. Crude is just very sensitive to inflationary pressures.

 

USD$75 today

 

One can fathom, but cannot predict.

 

I think that's true. Predictions will always be wrong, and so you should never hang your hat on forecasts, but rather just set goals and then work towards them.

That said, everyone ought to strive to have a coherent world view, and try to be as informed as possible. We should have a basic economic and historical understanding that A usually leads to B, and that means we should typically do C (for example).

 

from memory, debt and equities markets had broken down along with crude. hedge funds who had been in the crowded long everything trade threw whatever cash they had at the only uptrend left which was crude. The whole thing ended up collapsing along with the global economy anyway. it was the last gasp of that global bull in everything

 

I believe the 3 H's are important.

History: Invest with historical evidence to support your decision.
Hustle: Add your own value
Heaven: Hope your venture is blessed.

 

Love it!

 

The "house is not an asset" claim was wrong once you were able to borrow against it to buy investment properties.

The equity is then extremely valuable as say 20% deposits for IPs

 

Which means your house can spin off debt, but it can't spin off income. It is collateral.

 

But the 20% debt spins off income via the IP...