[Note: this material is for educational and entertainment purposes only]

STOCK MARKET MANIAS are like champions in their fields: they do not go down without a fight. In August of 2020, I posted how the current  extended mania or “super bubble” represents decades of Federal Reserve Bank policies that led to a stock market seemingly incapable of falling for any stretch of time (https://www.moviesmarketsandmore.com/a-mania-to-rule-them-all/).

The explanations for its longevity range from conspiracy theories to mass psychology to economic science:

• It is a self-fulfilling prophecy and a vicious cycle; no one sells because they are continually rewarded for buying and holding shares
• It is “propped up” by $1.4 trillion in QE per year (12 times $120 billion/month) and ZIRP or “zero-interest rate policy” at the first hint of economic slowdown
• It is a rational (“or rationalized”) display of fair value based on low interest rates and efficiencies gained from new technology and globalization
• the largest companies that comprise most of the value of the stock indices are increasingly advantaged by current conditions

Often enough, there is far too much information. This is when a little common sense plus some past experience are the “go-to” tools.

Let’s think about what happened. First, a global pandemic brought the world to a standstill–and it may have inserted itself as part of our new reality like a deadlier flu virus. Next, inflation spiked while we have supply chain disruption and structural unemployment. Fourth, the national debt keeps climbing to levels not seen since WWII.

Finally, despite the ravages of the virus, political chaos and expiring billions in social welfare packages, the stock market gained 50% percent in the last twelve months.

Yet, while the stock market rise can be explained by “a triple whammy” of conditions: zero interest rates, 120 billion monthly QE, and behemoth safety net programs like stimulus checks and increased unemployment payments, all those condition no longer prevail or are expected to be wound down very soon. Let’s also note that stock buybacks–which never ceased to be a key driver for stocks–are at risk of regulation along with the potential for a global minimum corporate tax.

Sooner or later, despite virtual money, virtual truth, virtual valuations (and values), Reality will assert itself. What that could look like falls along a wide spectrum of outcomes from the merely annoying to the apocalyptic.

I posted about “The Curse of the 80-Year Cycle” last year (https://www.moviesmarketsandmore.com/the-curse-of-the-80-year-cycle/) and from all I see, the threats to our republic are not diminishing. It’s also worth pointing out that past events from this cycle lasted longer than one or two years.

WRH