As the bubble grows

[planosteve]

GMO's Jeremy Grantham has a relatively gloomy outlook for the markets and economy.

But that doesn't mean he isn't somewhat bullish in the near-term. In his latest quarterly letter to investors, Grantham reiterates his expectation that the S&P 500 will surge to 2,250 before falling apart. That would be about 8% higher than Thursday's 2,085.

What's behind this?

Grantham blames decades of lax monetary policy. He goes all the way back to the Alan Greenspan era of the Federal Reserve. From his letter (emphasis added):

The key point here is that in our strange, manipulated world, as long as the Fed is on the side of a strong market there is considerable hope for the bulls. In the Greenspan/ Bernanke/Yellen Era, the Fed historically did not stop its asset price pushing until fully-fledged bubbles had occurred, as they did in U.S. growth stocks in 2000 and in U.S. housing in 2006. Both of these were in fact stunning three-sigma events, by far the biggest equity bubble and housing bubble in U.S. history. Yellen, like both of her predecessors, has bragged about the Fed’s role in pushing up asset prices in order to get a wealth effect. Thus far, she seems to also share their view on feeling no responsibility to interfere with any asset bubble that may form. For me, recognizing the power of the Fed to move assets (although desperately limited power to boost the economy), it seems logical to assume that absent a major international economic accident, the current Fed is bound and determined to continue stimulating asset prices until we once again have a fully-fledged bubble. And we are not there yet.

To remind you, we at GMO still believe that bubble territory for the S&P 500 is about 2250 on our traditional assumption that a two-sigma event, based on historical price data only, is a good definition of a bubble. (As we like to describe it, arbitrary but reasonable, for it fits the historical patterns nicely.)...

Read more: http://www.businessinsider.com/gmos-grantham-forecasts-fed-fueled-asset-bubble-2015-4#ixzz3YtJp8fE4

[GFB]

I see GMO is a hedge fund..which means.."fat cat fund."

His job is to make the fat cats..(who of course should he handling their OWN finances) sufficiently scared about the future so that they'll keep their millions right there in the hedge fund.

So it's a delicate balance t of good news and bad news that must be put out to the fat cats.

[planosteve]

Jeremy Grantham is a British investor and co-founder and chief investment strategist of Grantham Mayo van Otterloo (GMO), a Boston-based asset management firm. GMO is one of the largest managers of such funds in the world, having more than US $112 billion in assets under management as of September 2013.[1] Grantham is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, and is particularly noted for his prediction of various bubbles.[2]

Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes.

https://en.wikipedia.org/wiki/Jeremy_Grantham

[Red Oak]

Sell in May and go away........

[GFB]

Jeremy Grantham is a British investor and co-founder and chief investment strategist of Grantham Mayo van Otterloo (GMO), a Boston-based asset management firm. GMO is one of the largest managers of such funds in the world, having more than US $112 billion in assets under management as of September 2013.[1] Grantham is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets, and is particularly noted for his prediction of various bubbles.[2]

Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes.

https://en.wikipedia.org/wiki/Jeremy_Grantham

There are tens of thousands of these characters world wide..more than enough to find some saying whatever it is you want to hear.

And month to month, I've noticed you search for whoever is dealing out the latest doom and gloom..and there's never a shortage of those.

[GFB]

There's no need to find characters delivering doom and gloom about gold or other precious metals..they're delivering plenty on their own.

[planosteve]

There's no need to find characters delivering doom and gloom about gold or other precious metals..they're delivering plenty on their own.

When you come up with a solution to the 18 trillion and growing debt problem, let me know.

[GFB]

There's no need to find characters delivering doom and gloom about gold or other precious metals..they're delivering plenty on their own.

When you come up with a solution to the 18 trillion and growing debt problem, let me know.

As long as the deficit stays below 3% of GDP..it's easily manageable, and no..your kids and grandkids will not get stuck with any sudden bills.

But in your case, the solution is..just buy more gold.

[planosteve]

There's no need to find characters delivering doom and gloom about gold or other precious metals..they're delivering plenty on their own.

When you come up with a solution to the 18 trillion and growing debt problem, let me know.

As long as the deficit stays below 3% of GDP..it's easily manageable, and no..your kids and grandkids will not get stuck with any sudden bills.

But in your case, the solution is..just buy more gold.

I don't know where you get your figures unless your just making them up. Debt in the US at the end of last year was 101.53% of GDP. The only countries worse than the US were Italy and Japan.
http://www.tradingeconomics.com/united-states/government-debt-to-gdp

[jellowrestling]

Debt and deficit are two different things.

[planosteve]

Debt and deficit are two different things.

Good point. Debt is the accumulation of deficits accumulated over the long run.

[GFB]

Debt and deficit are two different things.

Good point. Debt is the accumulation of deficits accumulated over the long run.

And like I said..deficits under 3% of GDP are manageable and not problematic.

[planosteve]

Debt and deficit are two different things.

Good point. Debt is the accumulation of deficits accumulated over the long run.

And like I said..deficits under 3% of GDP are manageable and not problematic.

A 3% deficit is manageable. An 18 trillion debt is not.

[GFB]

And like I said..deficits under 3% of GDP are manageable and not problematic.

A 3% deficit is manageable. An 18 trillion debt is not.

You don't understand. If the deficit is manageable..that goes for year after year.

It would be nice if the Feds were financially responsible, but they never have been and they never will.

You and I have to pay our debts.

The Federal government simply has to manage their's.

They've been managing it for 240 years.

[planosteve]

JPMorgan Chase, the largest U.S. bank, one the largest providers of financial services in the world and one of the most powerful banks in the world has accumulated one of the largest stockpiles of silver, the world has ever seen.

The total JP Morgan silver stockpile has increased dramatically in the last four years. In 2011, JP Morgan has little or no physical silver. By 2012, they had acquired 5 million ounces of silver bullion.

Incredibly, in the last 3 years their COMEX silver stockpile has increased tenfold and is now over 55 million ounces (see chart below)

http://www.zerohedge.com/news/2015-05-01/jp-morgan-cornering-silver-bullion-market
I guess they don't know what they are doing.