Ignoring Risk and Taper Talk – S&P Doubles To Fastest Bull Market In History


Zero Hedge: In the fastest bull market in history, the S&P 500 doubled from its pandemic lows. While this is undoubtedly a newsworthy milestone, what does history suggest happens next?

“Here’s a market milestone to encapsulate the stunning recovery rally. The S&P 500 doubled its level from its pandemic closing low.”

“The broad equity benchmark has rallied 100% from its Covid trough of 2,237.40 on March 23, 2020 on a closing basis. It took the market 354 trading days to get there, marking the fastest bull-market doubling off a bottom since World War II, according to a CNBC analysis of data from S&P Dow Jones Indices.”

Nonetheless, it has been a significant rally, although rampant with speculative activity. So the question we need to ask is what does history tell us about what happens next? Read More …

Opinion: On March 23, 2020 the Federal Reserve provided, via the printing press, $6.8 trillion dollars to back-stop the falling financial markets and pledged $1.2 billion per month in liquidity that is still being supplied today.

That is what all the “taper talk” is all about. Tapering means that the Fed will gradually stop buying US bonds and let the market determine its future. You know, supply and demand and all that.

When the Fed tried that in 2018, the global market dropped 20%, until the Fed reversed course, and resumed bond buying driving down interest rates. In effect the markets scolded the Fed, and a new bull market leg began.

The problem today is that thanks to trillions in new spending by the Biden administration, inflation has picked up for the first time since the 1970’s. The best mechanism the Fed has to control inflation is to raise interest rates to choke off the supply of capital to businesses.

Conundrum. What to do?

Revelation 6:5-6 describes sudden global hyperinflation, meaning one or more major currencies of the world’s biggest economies will collapse early in the tribulation.

What could cause that?