In Spain, where there was a debt crisis just two years ago, investors are so eager to buy the government’s bonds that they recently accepted the lowest interest rates since 1789.
In New York, the Art Deco office tower at One Wall Street sold in May for $585 million, only three months after the going wisdom in the real estate industry was that it would sell for more like $466 million, the estimate in one industry tip sheet.
In France, a cable-television company called Numericable was recently able to borrow $11 billion, the largest junk bond deal on record — and despite the risk usually associated with junk bonds, the interest rate was a low 4.875 percent.
Welcome to the Everything Boom — and, quite possibly, the Everything Bubble. Around the world, nearly every asset class is expensive by historical standards. Stocks and bonds; emerging markets and advanced economies; urban office towers and Iowa farmland; you name it, and it is trading at prices that are high by historical standards relative to fundamentals. The inverse of that is relatively low returns for investors.
So what is the end-game? -
- a massive crash in valuations of Everything - hence massive rally in the USD & co?
- a massive crash in the value of USD & co - hence a massive rally in Everything relative to USD?
?
* USD & co: the U.S. Dollar and any associated currencies (formally or informally pegged, fixed or sliding)
Whatever happens, I am (hopefully) covered by the PP.
As a backup, my VP is a standard Boglehead "age in bonds" holding, with a heavy stack of international equities - developed and emerging nations - in the stock segment.
atrchi wrote:
So what is the end-game? -
- a massive crash in valuations of Everything - hence massive rally in the USD & co?
- a massive crash in the value of USD & co - hence a massive rally in Everything relative to USD?
?
* USD & co: the U.S. Dollar and any associated currencies (formally or informally pegged, fixed or sliding)
Stay diversified:
1/3 gold
1/3 guns
1/3 hard liquor
I knew a German woman who was a child in Germany during the Allied bombing raids. She said whenever the alerts would sound, her mom would always take her to the basement with three things: a Bible, an umbrella and a bottle of peach schnaps.
... Mountaineer
Put not your trust in princes, in a son of man, in whom there is no help. Psalm 146:3
Mountaineer wrote:
I knew a German woman who was a child in Germany during the Allied bombing raids. She said whenever the alerts would sound, her mom would always take her to the basement with three things: a Bible, an umbrella and a bottle of peach schnaps.
... Mountaineer
I'm down with the Bible and schnapps, but what was the umbrella for?
Dust
“Let every man divide his money into three parts, and invest a third in land, a third in business and a third let him keep by him in reserve.� ~Talmud
Mountaineer wrote:
I knew a German woman who was a child in Germany during the Allied bombing raids. She said whenever the alerts would sound, her mom would always take her to the basement with three things: a Bible, an umbrella and a bottle of peach schnaps.
... Mountaineer
I'm down with the Bible and schnapps, but what was the umbrella for?
