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The crash is coming

October 8, 2018

The crash is coming

Fred Hickey, editor of the influential investment newsletter «The High-Tech Strategist», compares today’s state of the stock market with the peak of the dotcom bubble in the year 2000 and spots bright opportunities in the gold sector.

  • (Bild: Charlotte Wilson/Getty Images)

Few investors have a deeper understanding of the tech sector than Fred Hickey. All the more concerning is his warning when it comes to the outlook for US equities. The renowned editor of the popular investment newsletter «The High-Tech Strategist» draws alarming parallels to the bursting of the dotcom bubble in the year 2000 and spots high risks in stock market darlings like Amazon (AMZN 1864.42 -1.34%) and Apple (AAPL 223.77 -0.23%). For the industry veteran, one important reason to be concerned are rich valuations. He also sees troubles ahead with respect to the rise in interest rates and the growing mountain of debt around the world. Against this background, the outspoken contrarian sees bright opportunities in gold and in attractively priced mining stocks.

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James Grant: «Markets Trust Too Much in the Presence of Central Banks»

December 12, 2017

James Grant: «Markets Trust Too Much in the Presence of Central Banks»

  • «We live in a hall of mirrors which our central banks have made for us.»
    «We live in a hall of mirrors which our central banks have made for us.» (Bild: Chris Goodney/Bloomberg)

James Grant, Wall Street expert and editor of the renowned investment newsletter «Grant’s Interest Rate Observer», warns of the unseen consequences of super low interest rate and questions the extraordinary actions of the Swiss National Bank.

Nearly ten years after the financial crisis, extraordinary monetary policy has become the norm. The financial markets seem to like it: Stocks are close to record levels and the global economy is finally picking up. Nonetheless, James Grant sees no reason to sound the all-clear signal. The sharp thinking and highly regarded editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» argues that historically low interest rates are distorting the perception of investors. »Principally, Mr. Draghi has robbed the marketplace of essential information», he criticizes the head of the European Central Bank for example. Highly proficient in financial history, Mr. Grant also questions the strategy of the Swiss National Bank. He fears that the voluntary depreciation of the Franc undermines the status of Switzerland as a global financial center.

Mr. Grant, monetary policy remains a primary theme for investors around the globe. What are your thoughts on the state of the financial world?
We live in a hall of mirrors which our central banks have made for us and that hall of mirrors distorts perceptions. That, I think is a big problem.

Why?
Interest rates are prices. In fact, they are the most consequential prices in a market economy because they discount future cash flows and they help us to set investment hurdles and to measure financial risks. In short, interest rates are prices and prices convey information and distorted prices convey misinformation.

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Olduvai IV: Courage
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Olduvai II: Exodus
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