by Gary Christianson, Miles Franklin:

Breaking News: The NASDAQ 100 Index closed at 10,094 on June 10, 2020, an all-time high, and the Fed recently printed $3 trillion of fiat dollars. Fed “printing” levitated stock prices and increased the wealth of the financial and political elite. However, “currency printing” and QE4ever do not create prosperity, wealth, social contentment, jobs, gold, silver, sanity, or health.

The COVID-19 virus and the ongoing economic shutdown have increased suicides, unemployment (over 44 million have filed), drug abuse, alcoholism, child abuse, anger, riots, and bankruptcies. But the Fed is doing what it does best: creating dollars; transferring wealth from the many to the few; increasing consumer price inflation; and lying about their actions.

Our doctors and politicians demanded we drink the “mask and lockdown Kool-Aid”… Maybe they saved many lives… Above my paygrade…

Did the lives “saved” from COVID-19 infections justify other lives lost, bankruptcies, economic collapse, unemployment and so much more? That question is above my paygrade… and too late. The “shutdown train” ran down the tracks and created an economic reset.

The first and second-order consequences of the shutdown include:

a) A “tech bubble.” What and how and why? See below.

b) Massive deficits, more unpayable debt, and escalating fiscal and monetary insanity. What financial and political nonsense did the economic shutdown conceal? Also, above my paygrade…

c) Millions of unemployed workers, missed mortgage payments, overdue rents, late credit card payments, bankruptcies, and the list continues.

d) Combine with Fed “printing,” QE4ever, various lies and coverups, a hefty dose of media nonsense, and there you have it… a Tech Bubble.

WHAT TECH BUBBLE?

Tesla stock: $15 in July 2010, and $1,001 on June 19.

Apple stock: $8 in August 2006, and $349 on June 19.

Amazon stock: $26 in July 2006, and $2,675 on June 19.

The Fed inflated another Tech Bubble in 2019-2020, like in 1999–2000. Note: the stock market top in 2007 was a real estate bubble, not a tech bubble.

Reminder: After the 2000 tech bubble, many companies failed, and the NASDAQ 100 dropped over 80%.

Could a crash happen again? Yes, but perhaps not if the Fed is all-powerful and blows more “fiat air” into the tech bubble. At my paygrade, an all-powerful Fed and a continuously inflating bubble look unlikely.

The Fed can create currency units, but not prosperity, jobs, or wealth.

Place your bets: (Drink the Kool-Aid if necessary.)

a) The Fed will boost the NASDAQ until election day and new highs are coming. Many people believe this scenario.

b) Much of the U.S. economy is crashing and, regardless of QE4ever, the markets will acknowledge that reality. Did you buy enough gold this month?

BUT IS THE NASDAQ 100 IN A TECH BUBBLE?

Consider the NASDAQ 100 to Russell 2000 ratio. Yes, the NASDAQ is in a bubble.

Examine the NASDAQ 100 to S&P 500 Index ratio. Yes, the NASDAQ 100 is in a bubble.

QUESTION: WHAT HAPPENS TO ALL BUBBLES?

ANSWER: THEY IMPLODE!

The NASDAQ 100 is a bubble. Stock prices for Tesla, Apple, and Amazon agree. Tech stocks are priced too high, especially the big tech stocks favored by the political and financial elite and the Swiss Central Bank.

Yes, the Swiss Central Bank creates currency from nothing, buys dollars, and invests in tech stocks, which supports the tech stock mania. Add TINA, “There Is No Alternative,” and tech stocks rise higher. Force interest rates lower and stocks look attractive. Ordinary greed, momentum followers, Robinhood day traders, optimists who expect the NASDAQ to rise to 20,000, and media hype push the index ever higher.

But bubbles always implode! Take care! Maybe the NASDAQ can rise further, supported by Fed “printing.” Maybe not.

IS THERE AN ALTERNATIVE TO THE TECH STOCK BUBBLE?

Of course, there are choices. TINA is mostly nonsense. Consider:

After the tech stock crash in 2000—2002, silver rose from $4 to over $48, even though the Powers-That-Be (PTB) weren’t happy about the rally.

After the DOW all-time high in 1968 and another nominal high in 1973, gold rose from $40 to over $800 while the nation floundered in “stagflation”—a stagnant economy combined with inflation in consumer prices.

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