Salient to Investors:
David Stockman said:
- QE is brewing asset bubbles around the world, exporting its lunatic policy worldwide
- Central banks all over the world have been massively expanding their balance sheets, and as a result of that there are bubbles in everything in the world, asset values are exaggerated everywhere.
- It is only a matter of time before the central banks lose control, and a panic sets in when people realize that these values are massively overstated.
- Foreign central banks are easing for either good reasons of defending their own trade and their exchange rate, or because they’re replicating the Fed’s erroneous policies.
- The Russell 2000 small-stock index is trading at 75 times reported trailing earnings, which makes no sense.
Mark Hulbert at Hulbert Financial Digest said the P/E based on 12-month trailing earnings of the S&P 500 is 19.1 is not indicative of a bubble, at least not one like 1999 which had a P/E of 29.7 in December 1999.
Click here to receive free and immediate email alerts of the latest forecasts.