Calling a Super Bubble: Front Row With Jeremy Grantham

[bucolic_frolic]

2. You make a valid point

We have more than 100 years of market data, maybe even 140 though early indexes were primitive. There have been periods of advance, and great crashes, and periods of decline. Participating in the first instance makes money, avoiding the last two conserves capital. The last 40 years of technological innovation, money printing, and deregulation have provided growth, crashes, and steady rebounds. Nonetheless there have been lost decades: following the 1929 crash, the consolidation of corporate growth/war/OPEC from 1968-1982, the 1987 crash, the dot com crash, the housing bubble/Great Recession crash. Crashes and declines are periods of tight money involving monetary contraction, debt liquidation, and often stagflation. Grantham's world view and thesis may well have fiscal sanity as part of its foundation. Liquidity does juice growth if you can tolerate inflation's erosion of the value of the currency, and we're about to find out. Powell has removed "transitory" from his prognosis.