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Welcome to Finance Experience! In today's video, we're discussing the forecast of Jeremy Grantham. The experienced hedge fund manager recently warned of the bursting of a gigantic super bubble. He stated that January 2022 was one of the worst starts to a stock market year since 2016. Several other characteristics, according to Grantham, prove that, in his own words, turmoil is imminent in the stock market.
Other experts, such as Robert Kiyosaki, also foresee a massive stock market crash and warn of a new global economic crisis. If you want to learn all the details, be sure to stay tuned until the end. Experienced hedge fund manager Jamie Green recently warned that the US is experiencing its fourth super bubble in the past 100 years.
The co-founder and head of Investment Strategy of Gentlemen at Otto explained his forecast in a report titled "Let the Wild One Piece Begin." The company has conducted extensive research on financial market bubbles and focused on... The definition agreed upon is that an investment bubble is a market that has moved more than two standard deviations above its trend mean.
Now we have even gone beyond the normal bubble; instead, the US market in particular is in a super bubble after moving three standard deviations away from the trend. In detail, the 83-year-old hedge fund manager wrote the following quote: " Previous stock market super bubbles had a number of special characteristics, each rare and taken together unique to these events.
In any case, these common characteristics have already appeared in this cycle. The checklist for a super bubble that goes through phases is now complete, and the wild mayhem can begin at any time." End quote. According to the checklist, stock market prices rise two to three times faster than the average speed of a bull market.
In this cycle, the Nasdaq rose by 58 percent from the end of 2019 to February 2021. Next, the market narrows and produces underperformance at Speculative stocks fall when the blue-chip market rises. According to Jeremy Grantham, this already happened in 1929 and 2000, and it's happening again now. Past super bubbles burst in 1929, triggering the Great Depression, and during the dot-com bubble of 2000, as well as with the financial crisis of 2008, which Grantham considers a real estate bubble.
Now, according to the hedge fund manager, we could be experiencing a super bubble that triggers one of the biggest stock market crashes of all time and thus potentially a new global economic crisis. January 2022 was one of the worst starts to a stock market year since 2016, as the US Nasdaq index fell by 15.6% and, for example, the electric car manufacturer Tesla plummeted by around 25%.
The stock of the social media giant Meter also crashed by a quarter at the beginning of February, wiping an incredible 230 billion US dollars from its market capitalization. All of this is, for Jeremy Grantham, a clear sign that the super bubble is about to burst, because the market experienced a similar downturn in 2000 during the great financial crisis of 2008.
Furthermore, the influential hedge fund manager believes that we are only at the beginning of a very painful time for investors. He wrote on this topic: " If all bubbles burst at the same time, the total shock and damage will be multiplied. When pessimism returns to the markets, we will face the largest potential discount on perceived wealth in U.S.
history." He said, " If the valuations of all these asset classes fall back by just two-thirds to historical norms, the total wealth losses in the U.S. alone will be in the range of $35 million." We'll link the article in the video description. Moreover, Jeremy Grantham is certain that the Fed's actions, especially lowering interest rates to zero and keeping them there for almost two years, are a major cause of...
The current market froth is simply bad economic policy, allowing bubbles to form, which leads to a terrible increase in inequality. The postponement of interest rate hikes by the Fed and other central banks has further intensified the stock market bubble. Now, the stock market crash is expected to take place in March or April 2022, as the first interest rate hike is expected then.
Some investment experts share concerns about the German Grand Slam. Susanne Street Investment, who is with Grin Stern, emphasized that the stock markets are experiencing a rollercoaster ride. The development of Meta clearly shows how nervous tech investors are at the moment. And the fund manager Christoph Brands writes the following quote in a recent article in Capital magazine: "Now, with several stocks, it has happened as it always does: a prolonged phase of colossal popularity was followed by a sudden crash; reason and a sense of reality are gaining the upper hand; euphoria and naivety are disappearing." Robert Kiyosaki also predicts that The stock market is heading towards the biggest crash in world history.
Kiyosaki expects the bankruptcy of the Chinese real estate developer E-Werk Rennt, which is indebted to the tune of 300 billion US dollars, to be the starting signal. Investor Mr. Ident also advises investors to take certain protective measures now, and former consultant James Wickelt describes in his book "The New Great Depression," published in January 2021, that the global financial and economic crisis will soon reach a new peak.
The book's synopsis states the following: "The current crisis is not like the 2008 financial crisis or the 1929 Great Depression. The new depression that arose from the Kogit pandemic is the worst crisis in the history of the world economy. Debt and demographics will destroy any chance of recovery. Social unrest is looming.
The ongoing stock market rally is an illusion." The worst is yet to come. James Unwraps takes a look behind the scenes to reveal the risks to our financial system and show what investors can do to best weather this time of unprecedented turbulence. End quote. And what do you think? Are the experts right, and will we soon experience a crash that can be described as the mother of all crashes?
Be sure to write your opinion in the comments. If you liked the video, then subscribe to our channel and activate the bell so you don't miss any more videos. See you soon, your Finance Experience team.
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