The bubble in the US stock market continues, no matter what. The difference between the capitalization of the stock market and the M2 money supply began to grow again, failing to really fall below $ 15 trillion.
It can also be noted that the current period of inflation of the bubble is the longest in history. The record of the 90s has already been broken.
It is such a high gap between the capitalization of assets and the volume of money supply, in my opinion, that is the reason for such high fluctuations in the financial markets. There is no liquidity.
As long-term practice shows, this “gap” tends to parity during periods of crises, and more precisely during periods of recovery, the difference between capitalization of assets and money supply comes to zero or close to them. This was in October 1987, in the spring of 2009, and it almost happened in 2002.
What, in my opinion, also speaks about the lack of liquidity in the markets – market fluctuations by 1 +% per day. This is a lot for the American stock market.
Over time, they will try to close this gap again, but it is not known to what heights it will be able to expand before that.
What can be said with certainty is that it is clearly not worth it for a long-term and reasonable investor to buy the market with a gap above $ 15 trillion.
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