Taps Coogan – July 30th, 2021
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Another day, another chart depicting our wild financial bubble. This chart comes from Kailash Concepts and shows the market cap of companies with a price-to-sales ratio of over 20.
During normal times, the market cap of companies with a P/S ratio of over ’20’ is somewhere between $500 billion and zero, because during normal times such companies are rare, if they exist at all.
Right now, the market cap of such companies is sitting at $4.5 trillion dollars, taking out the Dot-Com Bubble highs and confirming that this is one of the biggest bubbles of all time.
Every single major bear market since at least the 1920s has been proceeded by a Fed tightening cycle. Right now the Fed is running what is arguably the most accommodative policy stance in its history. This may go on for a long time, or not. Either way, it’s already a monetary policy failure.
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