{"id":34175,"date":"2020-12-29T20:27:06","date_gmt":"2020-12-29T18:27:06","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=34175"},"modified":"2025-08-28T17:25:59","modified_gmt":"2025-08-28T14:25:59","slug":"opinion-the-u-s-stock-market-awaits-a-crash-reminiscent-of-the-dot-com-bust","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/opinion-the-u-s-stock-market-awaits-a-crash-reminiscent-of-the-dot-com-bust\/","title":{"rendered":"Opinion: The U.S. stock market awaits a crash reminiscent of the dot-com bust"},"content":{"rendered":"<p>The U.S. stock index, the S&amp;P 500, hit a new high, while the trailing twelve-month profits of its components fell to their lowest since 2009. According to analyst Micha\u00ebl van de Poppe, such a disconnect between stock prices and the real economy signals the groundwork for a bear market.<!\u2014more\u2014><\/p>\n<p>This pattern was previously characteristic of the dot-com bubble and in the run\u2011up to the Great Depression of the 1930s.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">This chart shows the big discrepancy between the real economy and the current values of the stock market.<\/p>\n<p>A crisis is inevitable.<\/p>\n<p>It literally is going to occur in the next years and it\u2019s going to be as heavy as the 1930s.<\/p>\n<p>The last time we had such a gap; 2000 tech bubble. <a href=\"https:\/\/t.co\/USpIKfb5jt\">pic.twitter.com\/USpIKfb5jt<\/a><\/p>\n<p>\u2014 Micha\u00ebl van de Poppe (@CryptoMichNL) <a href=\"https:\/\/twitter.com\/CryptoMichNL\/status\/1343832375646535681?ref_src=twsrc%5Etfw\">December 29, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The expert says the two curves will converge sooner or later.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\" lang=\"en\">They will go back to reality indeed.<\/p>\n<p>\u2014 Micha\u00ebl van de Poppe (@CryptoMichNL) <a href=\"https:\/\/twitter.com\/CryptoMichNL\/status\/1343837366314799109?ref_src=twsrc%5Etfw\">December 29, 2020<\/a><\/p>\n<\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>One explanation for the \u2018dislocation\u2019 between the S&amp;P 500\u2019s dynamics and the real economy is the policy of <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%9A%D0%BE%D0%BB%D0%B8%D1%87%D0%B5%D1%81%D1%82%D0%B2%D0%B5%D0%BD%D0%BD%D0%BE%D0%B5_%D1%81%D0%BC%D1%8F%D0%B3%D1%87%D0%B0%D0%BD%D0%B8%D0%B5\" target=\"_blank\" rel=\"noopener noreferrer\">quantitative easing<\/a>, implemented by the Fed and other leading central banks around the world.<\/p>\n<p>Since August, and to the present day, the Federal Reserve has been purchasing assets worth $120 billion a month. At the December meeting, members of the rate\u2011setting committee <a href=\"https:\/\/www.cnbc.com\/2020\/12\/16\/fed-decision-december-2020-fed-commits-to-keep-buying-bonds-until-the-economy-gets-back-to-full-employment.html?&#038;qsearchterm=fed%20rate\" target=\"_blank\" rel=\"noopener noreferrer\">confirmed<\/a> that the quantitative easing programme would continue until full employment is achieved and inflation returns to 2%. In August, Federal Reserve Chair Jerome Powell <a href=\"https:\/\/forklog.com\/en\/news\/bitcoin-falls-as-powell-signals-readiness-to-push-inflation-higher\">stated<\/a> that the central bank was prepared to allow inflation to rise above the 2% target.<\/p>\n<blockquote class=\"wp-embedded-content\" data-secret=\"1edyylyp9p\">\n<p>COVID-19, the Fed\u2019s printing press and uncertainty: why now is the time to pay attention to Bitcoin<\/p>\n<\/blockquote>\n<p><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"\u201cCOVID-19, \u043f\u0435\u0447\u0430\u0442\u043d\u044b\u0439 \u0441\u0442\u0430\u043d\u043e\u043a \u0424\u0420\u0421 \u0438 \u043d\u0435\u043e\u043f\u0440\u0435\u0434\u0435\u043b\u0435\u043d\u043d\u043e\u0441\u0442\u044c: \u043f\u043e\u0447\u0435\u043c\u0443 \u0441\u0430\u043c\u043e\u0435 \u0432\u0440\u0435\u043c\u044f \u043e\u0431\u0440\u0430\u0442\u0438\u0442\u044c \u0432\u043d\u0438\u043c\u0430\u043d\u0438\u0435 \u043d\u0430 \u0431\u0438\u0442\u043a\u043e\u0438\u043d\u201d \u2014 ForkLog\" src=\"https:\/\/forklog.com\/exclusive\/covid-19-pechatnyj-stanok-frs-i-neopredelennost-pochemu-samoe-vremya-obratit-vnimanie-na-bitkoin\/embed#?secret=msve8gX90E#?secret=1edyylyp9p\" data-secret=\"1edyylyp9p\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe><\/p>\n<p>In a new Morgan Stanley report, by December 2022, the balance sheets of the Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan are forecast to grow by $12.8 trillion, or 29% of their nominal GDP. In another illustration, analysts note that the Fed is far from being the \u201cchampion\u201d \u2014 relative to nominal GDP the ECB and the Bank of New Zealand are printing money faster.<\/p>\n<div id=\"attachment_120977\" style=\"width: 936px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-120977\" class=\"size-full wp-image-120977\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM.png\" alt=\"Opinion: The U.S. stock market awaits a crash reminiscent of the dot-com bust\" width=\"926\" height=\"425\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM.png 926w, https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM-300x138.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM-768x352.png 768w\" sizes=\"auto, (max-width: 926px) 100vw, 926px\" \/><\/p>\n<p id=\"caption-attachment-120977\" class=\"wp-caption-text\">Data: Morgan Stanley.<\/p>\n<\/div>\n<p>The ultra-accommodative policy distorts pricing on financial markets and nudges investors to take on more risk in their positions. According to FINRA, the size of margin positions at the end of November reached a record $722.1 billion.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-120978 aligncenter\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM-1.png\" alt=\"Opinion: The U.S. stock market awaits a crash reminiscent of the dot-com bust\" width=\"624\" height=\"732\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM-1.png 624w, https:\/\/forklog.com\/wp-content\/uploads\/Clipboard-December-29-2020-8_07-PM-1-256x300.png 256w\" sizes=\"auto, (max-width: 624px) 100vw, 624px\" \/><\/p>\n<p>In crypto circles, central bank policy is associated with the meme <a href=\"https:\/\/brrr.money\/\" target=\"_blank\" rel=\"noopener noreferrer\">\u00abMoney printer go BRRR\u00bb<\/a>. It hints at the Fed\u2019s aggressive money printing during the coronavirus crisis. The meme <a href=\"https:\/\/forklog.com\/en\/news\/grayscale-investments-launches-tv-advertising-for-crypto-trusts\">laid the groundwork<\/a> for Grayscale Investments\u2019 August\u2011launched advertising campaign.<\/p>\n<p>Earlier, the MicroStrategy CEO, who has invested over $1 billion in cryptocurrency, <a href=\"https:\/\/forklog.com\/en\/news\/microstrategy-ceo-inflow-of-funds-from-liquid-assets-into-bitcoin-is-not-a-bubble\">explained<\/a> that moving funds into Bitcoin was a reaction to rising devaluation risks.<\/p>\n<p>Subscribe to ForkLog\u2019s news on Telegram: <a href=\"https:\/\/t.me\/forkloglive\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">ForkLog FEED<\/a> \u2014 the full news stream, <a href=\"https:\/\/telegram.me\/forklog\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">ForkLog<\/a> \u2014 the most important news and polls.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. stock index, the S&#038;P 500, hit a record as the trailing profits of its component companies fell to their lowest since 2009. According to analyst Micha\u00ebl van de Poppe, this divergence between stock prices and the real economy signals the beginnings of a bear market.<\/p>\n","protected":false},"author":1,"featured_media":34176,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1883,1138,1211,26],"class_list":["post-34175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-economic-crisis-2020","tag-opinions","tag-stock-market","tag-usa"],"aioseo_notices":[],"amp_enabled":true,"views":"15","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/34175","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=34175"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/34175\/revisions"}],"predecessor-version":[{"id":34177,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/34175\/revisions\/34177"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/34176"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=34175"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=34175"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=34175"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}