[2014] What's the next stock market bubble?

[Ralph Sir Edward]

What I've been reading is that the Treasury could revalue gold to $10,000 or more, per ounce, use that gain to buy Bitcoin and allow financial institutions to create stable coins. Interesting is our government did introduce the Bitcoin Act in 2024 and President Trump did sign an executive order in March to codify the new Bitcoin reserve.

I'm certain that cash will become less used and a digital currency will be more used. It kind of already is going digital in a way considering credit card purchases, Venmo and apps account for more purchases than cash.

I have heard a lot about silver and gold prices heading up. It's hard to tell how a gold revaluation will affect silver prices. Definitely, if the Treasury revalues gold to $10,000 the odds of silver values heading to the current 80-1 mark or $125 per ounce seem reasonable. Even without a re-valued gold price, the silver to gold ratio could normalize to 50-1 or $80 per ounce is what I've been reading. Hard to say.

Bill

Treasury revaluing gold really doesn't mean anything by itself. It only means something if the Treasury restores convertibility of dollars to gold (and vice versa), which isn't going to happen.

The Treasury has X tons of gold. It's actually worth what the market is willing to pay for it, in terms of a fiat currency. Mark it at $42.22 or $10,000, it's just a bookkeeping entry. The amount of gold didn't change. The government will still issue as many "dollars" as it wishes, at either price, because there is no interaction with the dollar and Treasury gold. (i.e. you can't slap either 42.22 <or> $10,000 at the Treasury and get a troy ounce of gold (31.1 grams); or slap a troy ounce and get either $42.22 <or> $10,000 for it. That's convertibility.)

The Central Banks have been buying gold because the Bank Of International Settlements (BIS) made gold a First Tier Asset in Jan 2023. That meant that international commercial banks could book bullion gold towards their reserve requirements, the same as Treasury Bonds or cash. It made gold a monetary commodity, while not making it a monetary currency. Yes, I know, weird, but that is the situation today. Banks seem to consider gold a better store of value than fiat currencies. Whether or not they are right, only the future will tell.

 

[WaikikiFirst]

here is the other chart of XLK (tech) vs Gold. Using both tickers separated by ":" gives you the ratio, so, yeah, if the line rises the numerator is winning and if the line is falling, theh denominator is winning. This is easier to read and says Gold still trailing XLK by about 10% over 5 yrs (seems to me), but you read it.
I read "The ratio started @ 0.0625 five yrs ago. Ratio is now 0.0694. Ratio rose, so XLK (the numerator) outperformed by about 10% over 5 yrs.

 

[WaikikiFirst]

SPY vs US REITs. SPY gave you > 1.5x the return of REITs over 5 yrs. Ratio started @ 4.8x and now = 7.5x

 

[easyrider]

5 Yr return for OVERALL US RE (as represented by REITs). Not just residential, and not mom & pop low overhead RE
Way below tech, most likely way below SPY, get to that later
View attachment 117057

It really depends on the amount you start with and continue to contribute. A high return that starts out at a low amount means very little in earnings in the beginning years of most accounts. After 40 years, the median 401k value is about $95,000 at retirement age.

Bill

 

[Carolinian]

5 Yr return for OVERALL US RE (as represented by REITs). Not just residential, and not mom & pop low overhead RE
Way below tech, most likely way below SPY, get to that later

REITs are a financial product. I always prefer actual ownership of property over a financial product.

In recent years some of the big boys in the financial world like Blackrock have been buying up lots of residential rental property, mostly single family homes.

 

[Carolinian]

Treasury revaluing gold really doesn't mean anything by itself. It only means something if the Treasury restores convertibility of dollars to gold (and vice versa), which isn't going to happen.

The Treasury has X tons of gold. It's actually worth what the market is willing to pay for it, in terms of a fiat currency. Mark it at $42.22 or $10,000, it's just a bookkeeping entry. The amount of gold didn't change. The government will still issue as many "dollars" as it wishes, at either price, because there is no interaction with the dollar and Treasury gold. (i.e. you can't slap either 42.22 <or> $10,000 at the Treasury and get a troy ounce of gold (31.1 grams); or slap a troy ounce and get either $42.22 <or> $10,000 for it. That's convertibility.)

The Central Banks have been buying gold because the Bank Of International Settlements (BIS) made gold a First Tier Asset in Jan 2023. That meant that international commercial banks could book bullion gold towards their reserve requirements, the same as Treasury Bonds or cash. It made gold a monetary commodity, while not making it a monetary currency. Yes, I know, weird, but that is the situation today. Banks seem to consider gold a better store of value than fiat currencies. Whether or not they are right, only the future will tell.

The Bank of International Settlements has always maintained its own gold reserves. National central banks have maintained gold in their own reserves for centuries before the BIS was even created. The percentage of gold in central bank reserves hit a low of 9% about 15 years ago, and has been increasing since, especially in the last few years, and is now up to 24% and rising as they gradually dump each others fiat currencies to buy gold. It was the Basel III banking regs that made gold a first tier asset class for commercial banks and has played a role in the gold price increase. Gold and silver have always had a foreign exchange cross with all other currencies in the FX market. As J.P. Morgan once said "Gold is money. Everything else is credit".

 

[easyrider]

Treasury revaluing gold really doesn't mean anything by itself. It only means something if the Treasury restores convertibility of dollars to gold (and vice versa), which isn't going to happen.

The Treasury has X tons of gold. It's actually worth what the market is willing to pay for it, in terms of a fiat currency. Mark it at $42.22 or $10,000, it's just a bookkeeping entry. The amount of gold didn't change. The government will still issue as many "dollars" as it wishes, at either price, because there is no interaction with the dollar and Treasury gold. (i.e. you can't slap either 42.22 <or> $10,000 at the Treasury and get a troy ounce of gold (31.1 grams); or slap a troy ounce and get either $42.22 <or> $10,000 for it. That's convertibility.)

The Central Banks have been buying gold because the Bank Of International Settlements (BIS) made gold a First Tier Asset in Jan 2023. That meant that international commercial banks could book bullion gold towards their reserve requirements, the same as Treasury Bonds or cash. It made gold a monetary commodity, while not making it a monetary currency. Yes, I know, weird, but that is the situation today. Banks seem to consider gold a better store of value than fiat currencies. Whether or not they are right, only the future will tell.

The scenario I though interesting is what Russia said about the USA 's plan to devalue the National Debt using Stable Coin. Russia says that the USA will reset the financial system by placing the the National Debt into crypto currency and flood the crypto cloud with Stable Coin. Part of the plan would be the Bitcoin Act which creates a Bitcoin National Reserve. Another part of the plan is to have the Treasury revalues gold to raise capital to purchase Bitcoin. Another part of the plan is to allow financial institutions to create Stable Coins.

We certainly live in interesting times.

Bill

 

[Carolinian]

The scenario I though interesting is what Russia said about the USA 's plan to devalue the National Debt using Stable Coin. Russia says that the USA will reset the financial system by placing the the National Debt into crypto currency and flood the crypto cloud with Stable Coin. Part of the plan would be the Bitcoin Act which creates a Bitcoin National Reserve. Another part of the plan is to have the Treasury revalues gold to raise capital to purchase Bitcoin. Another part of the plan is to allow financial institutions to create Stable Coins.

We certainly live in interesting times.

Bill

One of the big financial gurus (I don't recall which) called crypto a "digital Ponzi scheme". Why would any thinking government or central banker sell a real asset to buy that???

 

[easyrider]

One of the big financial gurus (I don't recall which) called crypto a "digital Ponzi scheme". Why would any thinking government or central banker sell a real asset to buy that???

Devaluing and eliminating a good portion of not all of the National Debt by placing the National Debt into the crypto cloud using Stable Coin is what the Russians says the USA is doing . The USA does have a Bitcoin Reserve of about 200,000 Bitcoin worth about two trillion two hundred eighty billion USD. There are plenty of articles related to this.

Bill

https://finance.yahoo.com/news/putin-adviser-accuses-us-using-022953212.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAG0t-BSmbWX-YlbaWhR_FziEia6wt0CJ0-5h1MkOLIoientAJtSFtWxtBezoMaT2VeL7IFTEYqqDQEjDajJDX9QoPzBbxkr86QEb1_mms6QsCN-Dk-JDskjJgAHgqE9235vcQPa0yAy5SbvqqhkPqyX0Do7ibEruav5w-oL1eFf_

 

[Brett]

Devaluing and eliminating a good portion of not all of the National Debt by placing the National Debt into the crypto cloud using Stable Coin is what the Russians says the USA is doing . The USA does have a Bitcoin Reserve of about 200,000 Bitcoin worth about two trillion two hundred eighty billion USD. There are plenty of articles related to this.

Bill

OK -- we'll see how the "Crypto Cloud" scheme works out


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Meanwhile, the bubble continues

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[easyrider]

Meanwhile, the bubble continues

What is a young investor ? I bet they are far and few in-between. Without a mentor helping them, the young probably don't invest in stocks unless they receive a program from work.

Bill

 

[am1]

Should stocks rise with the cease fire? Oil goes down.

 

[emeryjre]

If stock appreciation is all from inflation
Why has NVDA appreciated much more than the Nasdaq 100
Both items are subject to the same inflation
I know the answer
How about anyone else

 

[fillde]

Should stocks rise with the cease fire? Oil goes down.

That was no cease fire. That was a historic Mid-East Peace Treaty.

 

[Carolinian]

Bank of America now projects $5,000 gold next year, and their predictions often tend to low ball what actually happens.

 

[Brett]

What is a young investor ? I bet they are far and few in-between. Without a mentor helping them, the young probably don't invest in stocks unless they receive a program from work.

Bill

Your bet may be off - or the young are foolish to invest or investing in crypto

https://www.wsj.com/personal-financ...k-market-e79f89ad?mod=finance_feat1_hots_pos1

"A J.P. Morgan Chase report found that 37% of 25-year-olds used investment accounts in 2024, up from 6% of the age group in 2015. A sixfold increase in the number of
young people investing in the stock market over the past decade suggests a shift in the way they think about building wealth.

"It could also be that members of the first digitally native generation have different opinions about the best way to build wealth given their access to a much wider range of investments. The most likely outcome is that competition between the housing and stock market for their savings is here to stay until one market or the other rolls over.
—

 

[RENTER]

That was no cease fire. That was a historic Mid-East Peace Treaty.

Are you sure. After watching Leland Vittert's interview Waffa, I am not so sure. Israel saved her life twice and put her thru college. Yet she still hates them.

 

[emeryjre]

Your bet may be off - or the young are foolish to invest or investing in crypto

https://www.wsj.com/personal-financ...k-market-e79f89ad?mod=finance_feat1_hots_pos1

"A J.P. Morgan Chase report found that 37% of 25-year-olds used investment accounts in 2024, up from 6% of the age group in 2015. A sixfold increase in the number of
young people investing in the stock market over the past decade suggests a shift in the way they think about building wealth.

"It could also be that members of the first digitally native generation have different opinions about the best way to build wealth given their access to a much wider range of investments. The most likely outcome is that competition between the housing and stock market for their savings is here to stay until one market or the other rolls over.
—

Pensions have completely changed for current employees
Very few have defined benefit plans to rely on
Employers no longer take responsibility for their employees as regards retirement
So now employees are making their own plans
Stock investments are certainly part of the plan

 

[RENTER]

OK -- we'll see how the "Crypto Cloud" scheme works out


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Meanwhile, the bubble continues

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View attachment 117060

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View attachment 117062

They are doing what I did in the 1980's and like here I was mocked for. But instead of renting, I put an addition on my aging parents' home so I had my space until prices dropped, and they could remain there and not go a nursing home because I was there. The day of the 1987 stock market crash is the day they dug the hole to start construction.

To gain further space for myself, I picked up local timeshares to rent or get away to while investing in the stock market.

As for those who mocked me for not owning a home like they did when they bought at the top of the real estate, they were wiped out in the late 80's real estate crash while many lost their jobs and were foreclosed on.

My mother still lives there to this day and pays half the property taxes because of her age, and I left the house in her name. So, these kids have the right idea, invest then buy. But I fear they are group thinkers who are marching into bubbles. No different than previous generations but maybe more of them this time because of social media peer pressure.

 

[Ralph Sir Edward]

Pensions have completely changed for current employees
Very few have defined benefit plans to rely on
Employers no longer take responsibility for their employees as regards retirement
So now employees are making their own plans
Stock investments are certainly part of the plan

It's not something I'm a fan of, but if you want a pension, you can buy you own over time. They're called deferred annuities, sold by insurance companies. You buy one every year or so, and add up the payout at retirement. Only <you> have to pay for them yourself.

 

[easyrider]

Your bet may be off - or the young are foolish to invest or investing in crypto

https://www.wsj.com/personal-financ...k-market-e79f89ad?mod=finance_feat1_hots_pos1

"A J.P. Morgan Chase report found that 37% of 25-year-olds used investment accounts in 2024, up from 6% of the age group in 2015. A sixfold increase in the number of
young people investing in the stock market over the past decade suggests a shift in the way they think about building wealth.

"It could also be that members of the first digitally native generation have different opinions about the best way to build wealth given their access to a much wider range of investments. The most likely outcome is that competition between the housing and stock market for their savings is here to stay until one market or the other rolls over.
—

In our circle of the under 30 years old family members, many use apps, including investing apps like Robinhood. Everything is on their phone. Even though they use an investment app, there really isn't much in the account. I had thought about saying something about how light these accounts were but didn't want to discourage anyone. I think I came up with "way to go".

So far, all of my kids and grand kids are home owners with a mortgage by 30. My first and second grand daughters are both married and bought homes around age 25. All of them experienced a decent amount of asset appreciation within a few years of buying. This equity acts like a forced savings that is difficult to spend. All of them have to work to pay their mortgage. Keeping their noses to the proverbial grindstone to pay the mortgage will pay off for them better than stocks is my bet.

Bill

 

[Carolinian]

Gold is up over $4,300 this morning and silver over $53, both all time highs.

Bank of America's prediction of $5,000 gold next year may not take that long to happen.

 

[HitchHiker71]

Meanwhile, the bubble continues

While equity market valuations are certainly high in some respects, the bubble we should all be paying the most attention to isn't in the equity markets, it's in the debt markets. The past couple of major recessions were caused by instability in the debt markets that remains unresolved. The next big bubble is the sovereign debt bubble from the national debt. That's the only real bubble that matters, and it's bubble we should all be most concerned about IMHO. It is structural instability in the sovereign debt markets that will cause the next major economic downturn, not equities. That's why we're seeing ATHs in hedge investments such as BTC and precious metals and other alternative hedge investments that past couple of years now. Anyone tracking the macroeconomics knows this is coming, it's simply a question of when.

 

[Brett]

While equity market valuations are certainly high in some respects, the bubble we should all be paying the most attention to isn't in the equity markets, it's in the debt markets. The past couple of major recessions were caused by instability in the debt markets that remains unresolved. The next big bubble is the sovereign debt bubble from the national debt. That's the only real bubble that matters, and it's bubble we should all be most concerned about IMHO. It is structural instability in the sovereign debt markets that will cause the next major economic downturn, not equities. That's why we're seeing ATHs in hedge investments such as BTC and precious metals and other alternative hedge investments that past couple of years now. Anyone tracking the macroeconomics knows this is coming, it's simply a question of when.

Sure, all the prognosticators say it's a question of "when". I find it interesting the different interpretations of the high price of gold, some even blame it on one person !

"Both ends of the political spectrum view the flight to gold as a sign of deep-seated instability in the global economy, yet attribute the high price to their specific ideological grievances."

I own gold (less than 1% in an ETF) but really I'm counting on the other 40 - 45% in bonds, CD's, etc. and And my 60 - 65% stock index investment portfolio is also in real estate and Utility ETF's.

Anyone that has invested over 40+ years can afford to smile at the bubble


Meanwhile, --- party on !




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October 15, 2025

https://www.wsj.com/finance/banking/bank-earnings-goldman-jpmorgan-q3-profit-ee2cf2cc?gaa_at=eafs&gaa_n=ASWzDAjqVJtIXgb2dCFX08fZ0hVBbL_WJP73oxxGo4dbNzkemD4ILDB-53F6&gaa_ts=68efaee2&gaa_sig=RtoE1G04bbmXvB6XLNPSwrCSPHBEC3q1KGlnFAm9aNUs4Az3qsxfN9a8x6rF-pvHAGE6N4BxnkVMJjbgcgyaZQ==


Wall Street is firing on all cylinders.

Dealmaking, trading and corporate lending are gaining steam and fueling profits at the nation’s biggest banks, with Goldman Sachs GS 0.12%increase; green up pointing triangle, JPMorgan Chase JPM 3.19%increase; green up pointing triangle, Citigroup C 0.74%increase; green up pointing triangle and Wells Fargo WFC 2.91%increase; green up pointing triangle all beating third-quarter profit and revenue forecasts.

Goldman is now on pace for its best year ever in its main investment-banking and markets division. JPMorgan is on track to make over $50 billion in annual profit for the second year in a row. BlackRock BLK 1.93%increase; green up pointing triangle is sitting on a record $13.5 trillion in assets under management.

The strength is evident across many of the banks’ businesses, reflecting the enthusiasm in the stock market and corporate boardrooms.

Record high stock markets fueled increased trading and borrowing by hedge funds and others to buy even more securities. President Trump’s policymaking is adding volatility that keeps traders eager to move, but not so much to spoil the punch.

Financing activity is surging, with mergers on the rise. Then there are the massive investments in the rise of artificial intelligence, building out data centers and other infrastructure.

 

[WaikikiFirst]

Gold is up over $4,300 this morning and silver over $53, both all time highs.

the everything (well, everything but small "value" stocks and hydrocarbons and youaddone) bubble rolls on. ANother wild day

The one I don't own is WMT, but now WMT is "an AI stock". Thinking of shorting WMT for grins & giggles, not that I've been in a WMT or on their website in almost 25 yrs. And, the one I have a loss on? NKE. Can someone pwetty pweeze make NKE "an AI stock". I can't stand NKE but I bought it recently for a turnaround. Oh well, instead of a turnaround, I'll take an "AI stock" story any day