No monetary system has lasted forever, and the present one will be no exception. The fall of a monetary system could correspond to a huge transfer of wealth. We may be close to the birth of a new system. It could be preceded by a reset. In fact, there are excesses on the markets that typically prelude to a sharp decline in prices.
Bullish speculation by small investors reached an all-time high over three times higher than the Internet bubble period.
Another alarming analogy with the pre-crisis period of 1929 and 2000 is explained in this anecdote:
"Banker John P. Morgan Jr went on a day of 1929 from his trusted shoeshine who asked if he and his friends could buy some shares through the intermediation of Morgan. The three friends had about $40, a conspicuous amount in 1929. Morgan politely said no, hurried back to his office and ordered his agents to sell all the shares by the end of the day. Morgan thought, "If the shoeshine’s buying stock, who else is left?" Within a few days the market collapsed in 1929 and Morgan looked like a genius. He was not a genius; he simply noticed that the purchase orders were probably coming to an end. It wasn’t his army of analysts that predicted the collapse, it was a shoeshine."
Today we are witnessing the same phenomenon. On the various social networks are appearing improvised brokers that boast better performance than professional managers. They, to the doubts on the sustainability of such an overrated market, answer: "This time is different". The same sentence you heard on the eve of the worst financial cataclysms. This time it will be really different?
Research on Plasticity, Financial Section 2021 © - january 11th 2021