11-24-17 The Greatest Bubble in History
Nearing Midnight: The Greatest Bubble in History - Todd Strandberg - http://www.raptureready.com/category/nearing-midnight/
The US Stock Market has never had a better run in the history of Wall Street. At the Depth of the Great Financial Crisis, the Dow Jones Average screeched down to 6,594.44 on March 5, 2009. Since that low, the Dow has risen 350 percent. There is no other eight-year period where the Index has seen such a massive point gain.
President Trump is the only president in US history to oversee two stock-market rallies of nine days or more where the markets set new highs each and every day. In February, Trump matched President Reagan's 1987 record of the Dow reaching a new high for its 12th day in a row. In August, President Trump reigned over a nine-day stock market rally with each day reaching record highs.
In the year since Donald Trump was elected president, the Dow Jones Industrial Average has closed at record highs 82 times - also a record. The 28.5 percent rally is the biggest one-year gain in the popularity index under a newly-elected commander-in-chief since the Great Depression.
What has made all these record highs possible is the lack of any major down days. Last month the Dow broke its previous record of the number of days without a three-percent drawdown.
If you find yourself left out of this massive explosion in wealth, you are not alone. For the first time ever, the richest one percent now owns more than half of the world's wealth. "The share of the top one percent has been on an upward path ever since, passing the 2000 level in 2013 and achieving new peaks every year thereafter. According to our latest estimates, the top one percent own 50.1 percent of all household wealth in the world." - Credit Suisse
The secret to the stock market's unrelenting rise is the flood of money coming from the government-driven credit expansion. The world's four most powerful central banks have pumped more than $10 trillion into the global economy since the financial crisis. The Swiss National Bank alone owns $90 billion in US stocks.
It is not just the US Stock Market that is getting bought out by central banks. The Japanese Central Bank has purchased most of the stock that makes up the Nikkei index. The holdings of Bank of Japan have become so massive, it now owns 75 percent of the top index funds in that nation. Only six percent of Japanese people report owning any stocks.
All this buying has created one of the greatest stock-market bubbles in history. A good example of these insane valuations that big tech companies have reached is the stock of Amazon. Legendary trader, Sam Zell, recently stated that in order to justify the 290 earnings multiple that Amazon trades at today, the company would have to be worth 25 percent of the US economy five years from now. Amazon has annual sales of $160 billion, and to reach 25 percent, its sales would have to rise to $3.2 trillion.
He made this same observation about Cisco Systems stock in 1997. At its peak, Cisco was worth $600 billion in today's money. It is currently only worth $170 billion and has annual sales of $48 billion, which only amount to a tiny fraction of the US economy.
It's not just stocks that are a bubble territory. The cryptocurrency bitcoin has recently hit $7,900 per bitcoin. When bitcoin first started trading in 2008, it was selling for $.008. Since then, it has gone up almost a million times in value. There is no other asset in human history that has had such a huge appreciation. The Great Tulip Mania of the 1600's only saw prices rise 6,000 times.
The price of bitcoin has huge swings in its price. As soon as it hit that nearly $8,000 high, it declined by 30 percent down to $5,500. It then bounced back above the $7,000. The lack of any panic selling on the part of the holder of bitcoin seems to indicate it can trade higher. With the total value of cryptocurrencies now over $200 billion, the days of 10- or 100-fold increase would seem to be in the past. Since we passed crazy a long time ago, anything is now possible. It's not just the price that will eventually reign in this mania. About a year ago, there were only 400 of these cryptocurrencies. Today, there are over 2,200 of them.
If there was any doubt about whether we are living through the biggest bubble in history, it should have ended last Wednesday. A rediscovered painting by Leonardo da Vinci broke the record price for art at an auction, selling for just over $450 million. For all the new bitcoin billionaires, that's only 62,000 digital coins. The previous auction record for an Old Master painting was held by Peter Paul Rubens, whose "The Massacre of the Innocents" fetched $76.5 million in 2002. For anyone thinking that half a billion dollars for da Vinci was a fair price, I saw a painting at the same auction that looked like it was scribed in 30 seconds by a blindfolded child. It sold for $46 million.
I think the reason why we are seeing one bubble after another is because of Bible prophecy. Jesus said the time of his return for the Church would be equal to the times of Noah. Everyone was tranquilly eating and drinking and then, suddenly, disaster took them by surprise. The longer this historic bubble lasts, the more we, as Christians, should be looking for our Saviour.
"But as the days of Noe were, so shall also the coming of the Son of man be. For as in the days that were before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noe entered into the ark, And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be" (Matthew 24:37-39).
The US Stock Market has never had a better run in the history of Wall Street. At the Depth of the Great Financial Crisis, the Dow Jones Average screeched down to 6,594.44 on March 5, 2009. Since that low, the Dow has risen 350 percent. There is no other eight-year period where the Index has seen such a massive point gain.
President Trump is the only president in US history to oversee two stock-market rallies of nine days or more where the markets set new highs each and every day. In February, Trump matched President Reagan's 1987 record of the Dow reaching a new high for its 12th day in a row. In August, President Trump reigned over a nine-day stock market rally with each day reaching record highs.
In the year since Donald Trump was elected president, the Dow Jones Industrial Average has closed at record highs 82 times - also a record. The 28.5 percent rally is the biggest one-year gain in the popularity index under a newly-elected commander-in-chief since the Great Depression.
What has made all these record highs possible is the lack of any major down days. Last month the Dow broke its previous record of the number of days without a three-percent drawdown.
If you find yourself left out of this massive explosion in wealth, you are not alone. For the first time ever, the richest one percent now owns more than half of the world's wealth. "The share of the top one percent has been on an upward path ever since, passing the 2000 level in 2013 and achieving new peaks every year thereafter. According to our latest estimates, the top one percent own 50.1 percent of all household wealth in the world." - Credit Suisse
The secret to the stock market's unrelenting rise is the flood of money coming from the government-driven credit expansion. The world's four most powerful central banks have pumped more than $10 trillion into the global economy since the financial crisis. The Swiss National Bank alone owns $90 billion in US stocks.
It is not just the US Stock Market that is getting bought out by central banks. The Japanese Central Bank has purchased most of the stock that makes up the Nikkei index. The holdings of Bank of Japan have become so massive, it now owns 75 percent of the top index funds in that nation. Only six percent of Japanese people report owning any stocks.
All this buying has created one of the greatest stock-market bubbles in history. A good example of these insane valuations that big tech companies have reached is the stock of Amazon. Legendary trader, Sam Zell, recently stated that in order to justify the 290 earnings multiple that Amazon trades at today, the company would have to be worth 25 percent of the US economy five years from now. Amazon has annual sales of $160 billion, and to reach 25 percent, its sales would have to rise to $3.2 trillion.
He made this same observation about Cisco Systems stock in 1997. At its peak, Cisco was worth $600 billion in today's money. It is currently only worth $170 billion and has annual sales of $48 billion, which only amount to a tiny fraction of the US economy.
It's not just stocks that are a bubble territory. The cryptocurrency bitcoin has recently hit $7,900 per bitcoin. When bitcoin first started trading in 2008, it was selling for $.008. Since then, it has gone up almost a million times in value. There is no other asset in human history that has had such a huge appreciation. The Great Tulip Mania of the 1600's only saw prices rise 6,000 times.
The price of bitcoin has huge swings in its price. As soon as it hit that nearly $8,000 high, it declined by 30 percent down to $5,500. It then bounced back above the $7,000. The lack of any panic selling on the part of the holder of bitcoin seems to indicate it can trade higher. With the total value of cryptocurrencies now over $200 billion, the days of 10- or 100-fold increase would seem to be in the past. Since we passed crazy a long time ago, anything is now possible. It's not just the price that will eventually reign in this mania. About a year ago, there were only 400 of these cryptocurrencies. Today, there are over 2,200 of them.
If there was any doubt about whether we are living through the biggest bubble in history, it should have ended last Wednesday. A rediscovered painting by Leonardo da Vinci broke the record price for art at an auction, selling for just over $450 million. For all the new bitcoin billionaires, that's only 62,000 digital coins. The previous auction record for an Old Master painting was held by Peter Paul Rubens, whose "The Massacre of the Innocents" fetched $76.5 million in 2002. For anyone thinking that half a billion dollars for da Vinci was a fair price, I saw a painting at the same auction that looked like it was scribed in 30 seconds by a blindfolded child. It sold for $46 million.
I think the reason why we are seeing one bubble after another is because of Bible prophecy. Jesus said the time of his return for the Church would be equal to the times of Noah. Everyone was tranquilly eating and drinking and then, suddenly, disaster took them by surprise. The longer this historic bubble lasts, the more we, as Christians, should be looking for our Saviour.
"But as the days of Noe were, so shall also the coming of the Son of man be. For as in the days that were before the flood they were eating and drinking, marrying and giving in marriage, until the day that Noe entered into the ark, And knew not until the flood came, and took them all away; so shall also the coming of the Son of man be" (Matthew 24:37-39).
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