Photo: wikimedia commons
Richard Russell doesn’t appear to be backing down on his prediction of total apocalypse for US markets.But maybe the economy will keep running for longer than expected thanks to the biggest Fed bubble ever — a “Mega-bubble” that lifts all markets (via Prag Cap):
Right now, we’re seeing the results of a bubble in Fed-created liquidity. When the water continues to pour into a bath-tub, everything — the rubber ducks, the plastic boats, the soap bars — float up with the water line. This goes on until either the water flows over the tub and onto the floor — or mum comes in and pulls the plug. I think that’s what we’re experiencing now in the markets. Everything tradeable, stocks, bonds, gold, silver, commodities in general are rising. I call it an all-around mega-bubble. It will continue until someone, purposely, or by mistake, pulls the plug. There are only two items which seem immune to the surging liquidity. The two items are home prices and unemployment. But there’s another possibility. Build a tower out of children’s blocks. You can build that tower just so high, and at some point the last block is too much. The tower shudders, it tilts and falls over.
Thus selling everything is still the best option.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.