The Markets are Separated from Reality

by JDH on May 29, 2021

I have nothing much to say this week.    Bitcoin is 41% lower than it was 19 days ago, but the North American stock markets are at or near record highs.  Why?  Is it because the economy has re-opened and everyone is back to work?


In Toronto, Canada’s largest city, the streets are empty, with most workers either not working or working from home.  Some employers are gearing up for a return in September.  The big employers, located in skyscrapers, are targeting January.  Many businesses are closed permanently and will never re-open.

Sounds like a recipe for a high stock market, eh?

Speaking of Bitcoin, many are not surprised that it has crashed, since it is based on “nothing” and therefore has no intrinsic value.

Contrast Bitcoin with the US Dollar which has $27 trillion in circulation, and 25% of that was printed in the last six month.  Since it’s inception it loses 2% to 5% of its value every year, and yet it is the world’s reserve currency, and will continue to be for many years into the future.

What’s my point?

The markets do not reflect reality.

The Big Bad Virus is not finished.  Vaccination of the population is proceeding slowly, and new variants keep appearing.  We aren’t out of this yet.

So, if you have a chance to take profits and hold some cash, it’s not a bad idea.

Those are my abbreviated thoughts.  More next week, probably.