This week, the US stock market has displayed what looked like a peak. Not just a normal peak, but one that looks like the charts just before the market crashed in 2007, 2000. This means the market may either push through and plateau. Or it will crash again, as it has done before - perhaps even worse than 2007, and start a global depression akin to the 1930s. That depression was then followed by an ugly protracted global war.
Other Signs of a Bull
The technology bubble has emerged, similar to the 90's tech investment frenzy. In the past few years, VC investment was soft where only truly ground breaking companies received money. That is all in the past. Today, VCs around the world are investing in net 2.0 wannabe sites.
Behind all this are stimulus led by USA Quantitative Easing (QE), which adds around US$90 billion into the US financial system every month. Total to date is $4 trillion withlimited no exit in mind.
Emerging Markets. Fuel for Growth
Although the world is at a precipice, it is also at the cusp of some great events. In an interesting Charlie Rose interview, White House Economic Tsar Lawrence Summner shared an interesting phenomenon recently:
- Life expectancy and infant mortality of rest of the world, will improve to reach US levels. The first time in hundreds of years
- The reason of this is greater awareness spurred by the mobility and democracy of information and knowledge. Growth markets are more easily identified and exploited. Strife is more readily targeted and addressed.
- Many US firms are benefiting from this growth. They are also in a unique position of being a energy exporter soon, as well as starting to control healthcare cost.
This seems to be driving the markets. Mature economies are keeping themselves afloat whilst regional markets are scurrying to reach critical mass using products sold by Americans, Europeans and Japanese. But we are probably a generation away from critical mass.
So, This means the next crash will be painful because there may not be enough cash in the system to payout the losses. Hopefully it is not fatal because the rest of the world seems to be hurtling towards maturity, as long as Mother Earth herself doesn't collapse. But that is another story.
*This is my first musing after the end of Australian rugby season, which took a lot of my writing time
The technology bubble has emerged, similar to the 90's tech investment frenzy. In the past few years, VC investment was soft where only truly ground breaking companies received money. That is all in the past. Today, VCs around the world are investing in net 2.0 wannabe sites.
Behind all this are stimulus led by USA Quantitative Easing (QE), which adds around US$90 billion into the US financial system every month. Total to date is $4 trillion with
Emerging Markets. Fuel for Growth
Although the world is at a precipice, it is also at the cusp of some great events. In an interesting Charlie Rose interview, White House Economic Tsar Lawrence Summner shared an interesting phenomenon recently:
- Life expectancy and infant mortality of rest of the world, will improve to reach US levels. The first time in hundreds of years
- The reason of this is greater awareness spurred by the mobility and democracy of information and knowledge. Growth markets are more easily identified and exploited. Strife is more readily targeted and addressed.
- Many US firms are benefiting from this growth. They are also in a unique position of being a energy exporter soon, as well as starting to control healthcare cost.
This seems to be driving the markets. Mature economies are keeping themselves afloat whilst regional markets are scurrying to reach critical mass using products sold by Americans, Europeans and Japanese. But we are probably a generation away from critical mass.
So, This means the next crash will be painful because there may not be enough cash in the system to payout the losses. Hopefully it is not fatal because the rest of the world seems to be hurtling towards maturity, as long as Mother Earth herself doesn't collapse. But that is another story.
*This is my first musing after the end of Australian rugby season, which took a lot of my writing time
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