We think it is a good time to park your wealth – at least the part of your wealth you want to hold on to – in gold and silver.
We have detailed the reasons in these posts and invite our friends and readers to review what we have been writing. Those reasons have to do with things like the debt and deficits, spending and taxation, fiat money and the Fed, and a world that is growing increasingly dangerous and disconnected from reality.
Now we would like to share Jeremy Grantham’s concerns about the stock market bubble.
Grantham is co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm. Wikipedia says that “Grantham has built much of his investing reputation over his long career by claiming to identify speculative market ‘bubbles’ as they were unfolding.”
We last wrote about him in September when he said that Fed liquidity and the Biden stimulus money are “violating a cardinal rule.” They are “bubbling” stocks, bonds, and real estate all at the same time.
He told Reuters recently that “this bubble is the real thing, and everyone can see it. It’s as obvious as the nose on your face”
Grantham thought in the fall the investors might have a little more time – months not years – to take their profits and head to safety. “A bust might take a few more months,” he said then, “and, in fact, I hope it does, because it will give us the opportunity to warn more people.”
Now those months have passed and it does not sound like Grantham thinks it is wise to wait any longer.
Grantham’s new client advisory was published on Thursday (1/20/22). Note the title: “LET THE WILD RUMPUS BEGIN!” The subtitle is just as revealing: “Approaching the End of) The First U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities.”
Grantham begins by describing “superbubbles” of the past including “in the U.S. in 1929 and 2000 and in Japan in 1989. There were also superbubbles in housing in the U.S. in 2006 and Japan in 1989. All five of these superbubbles corrected all the way back to trend with much greater and longer pain than average.”
“Today in the U.S. we are in the fourth superbubble of the last hundred years.”
One of the characteristics of the bubbles gone by is that end with blow-off tops. Grantham describes that as “an accelerating rate of stock price growth to two or three times the average of the preceding bull market.” He provides these graphs as examples:
As we have said before, when the bubbles pop, there will be a stampede to the safe havens of gold and silver. We recommend you take advantage of today’s prices and beat the rush.
Learn more by speaking with a Republic Monetary Exchange gold and silver professional.