Bubble like it's 1929 or 2008? The same, or different?................from Rico

Are we partying like it's 1929, or 2008?

- Is it more of the same-old, same-old....or is it 'different' this time?

 

1929.

After WWI Europe was broke, including the 2nd largest global economy Germany (the US was 1st, the UK 3'rd).

- Germany increased social spending greater than threefold, but had to run massive deficits and lower interest rates while it printed money (easing). [Sound at all like the US and Europe today?]

- Money moved from Europe to the US, where stocks increased 400% from 1921-1929....then losing 90% of their value when the bubble popped.

 

Today.

Globally, there have been more than 20 interest rate cuts so far in 2015.

- Interest rates are at record lows in Australia, Canada, Switzerland, Russia and India, and are actually negative now in Denmark, Sweden, and Switzerland.

- Seven of the 10 largest global economies are currently printing money (easing), not least the FED, ECB, and BOJ.

- The deficit and social spending circumstances our Central Bankers and politicians have put all of us into are bigger issues than can be discussed here, but think Greece, then understand the US is in even worse shape than Greece...actually almost everybody is.

- Money is moving into the US, where stocks are trading at a CAPE* of 27.3 (the 1929 CAPE was 30, which also coincidentally peaked just before the 2000 dot.com burst and the 2007 housing bubble burst....giving us the seemingly never-ending 2008 "Great Recession").

 

*CAPE: A valuation measure where price is divided by 10-years of earnings. Called the cyclically adjusted price-to-earnings ratio, or CAPE for short.