In the tumultuous world of finance, patterns often emerge as harbingers of impending shifts, and one such pattern—the double top—has caught the attention of market watchers worldwide. As investors grapple with the specter of uncertainty, a 40-year chart paints a stark picture of the US stock market’s trajectory, with ominous implications for the technology sector and beyond.
The chart in question reveals a startling trend: the US Stock Market Capitalization as a percentage of GDP has ballooned to unprecedented levels, reaching a staggering 187% in 2024—a sharp contrast to the modest 42% recorded in 1984. This exponential growth, accompanied by eye-watering debt levels, points to the formation of what many consider the largest bubble in history.
But what lies behind this meteoric rise? The answer, it seems, lies in liquidity—the lifeblood of risk assets, including growth assets, crypto, and technology. As liquidity floods the market, fueled by a relentless wave of monetary stimulus, risk assets soar to dizzying heights, seemingly detached from economic fundamentals.
Yet beneath the veneer of prosperity lurks a precarious reality. The US dollar’s interplay with the Japanese yen serves as a potent reminder of the fragile ecosystem in which financial markets operate. With billions of dollars in US treasuries poised to support the yen, the stage is set for a dramatic showdown—a battle that could have far-reaching implications for global markets.
As the worm turns once again, investors brace for the inevitable reckoning. Will the bubble burst with a deafening roar, or will it slowly deflate, leaving behind a trail of economic wreckage in its wake? Only time will tell. But one thing is certain: in the high-stakes game of finance, the consequences of complacency are too grave to ignore.
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When you see a double top you sell a double top!
This 40 year chart could be foretelling commodity prices outperforming the technology sector on a longer term basis going forward. pic.twitter.com/dcmG6n5OJu
— bob coleman (@profitsplusid) May 5, 2024
US Stock Market Capitalization as % of GDP…
1984: 42%
1994: 63%
2004: 93%
2014: 114%
2024: 187% pic.twitter.com/PkFAa3WHD4— Charlie Bilello (@charliebilello) May 5, 2024
🚨CRASH HISTORY 🚨
Dow jones .
% gains from crash to crash over the decades .
One, can clearly see whats being created .
Largest bubble in history, accompanied by eye watering debt . pic.twitter.com/vvF4n5IQPT
— The Great Martis (@great_martis) May 6, 2024
USDJPY
80 biilion Blown
Worm turning once again ..
More US treasuries need to be sold to support YEN
100s of billions .
Will all know what happens next . pic.twitter.com/27FaT9tmcD
— The Great Martis (@great_martis) May 6, 2024
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