We’re partying like it’s 1928.
Of course, that was the year before the Black Tuesday stock market crash and the beginning of the Great Depression. During a recent interview on CNBC’s Power Lunch, Morgan Creek Capital CEO Mark Yusko said he sees a lot of parallels between today and 1928-1929.
I have this belief that we’re flowing toward the path of 1928-29 when Hoover was president. Now Trump is president. Both were presidents with no experience who come in with a Congress that is all Republican, lots of big promises, lots of things that don’t happen and the fall is when people realize, ‘Wait, it hasn’t played out the way we thought.’’
During her recent testimony before Congress, Fed Chair Janet Yellen continued to talk up the ‘strong’ US economy. Last month, she said banks are ‘very much stronger’ and another financial crisis is unlikely anytime soon. Stocks continue to climb. Analysts seem positively giddy about the employment numbers.
It’s a veritable party.
But as Yusko pointed out, there are some sketchy things going on in the other room. He says that too much stimulus and quantitative easing have resulted in a ‘huge’ bubble in US stocks.
This post was published at Schiffgold on JULY 14, 2017.