Well, have you already forgot the surprises of 2020? Here the new "black swan" was brought up...
A Deutsche Bank study found that 89% of market professionals surveyed believe that financial markets are currently in a bubble.
Bitcoin and technology stocks are seen as a more dangerous case, with half of the respondents rating cryptocurrency at 10 on a scale of 1 to 10 (in terms of risk).
US tech stocks were viewed as the next largest bubble with an average score of 7.9 out of 10.
Investors believe that Bitcoin, Tesla, is likely to fall in price by more than half over the next 12 months.
At the same time, more than 2/3 of the professionals surveyed believe that the US Federal Reserve will not stop the stimulus program until the end of 2021, which could catalyze the further growth of the bubble in the financial technology sector.
Here you can add:
- The highest level of the S & P500 index in history.
- Peak in gold prices over the past 10 years.
- The new peak in Bitcoin that we saw recently.
- The maximum value of the Chinese stock CSI 300 Index.
- Twofold increase in the P / E ratio (price of shares to earnings per share) APPLE from 18 to 36 (in simple words: having invested $ 1, you need to wait 36 years for it to return as a profit).
- Tesla is estimated at 1,500 annual profits
When to expect a bubble to burst?
Most likely it will happen soon, up to 1-1.5 years. Fighting against covid, central banks supported the economies of their countries. Vaccination of more than 50% of the population of these countries will reduce restrictive measures and the role of central banks.
Well, and after printing a lot of money, the debt bubble was inflated. Returning debts, countries will increase fiscal pressure, which will affect the economy and investor sentiment. A parade of defaults of countries with excessive debt burden can also be a trigger. Well, in the information age, any tweet of the investment market "guru" who will make good money on the crisis, as Buffett did on the British pound, can be a trigger.
What will happen to the global economy?
- The financial crisis. Bubbles will subside, liquidity will shrink, currency will rise in price, investors will traditionally prefer developed markets to developing ones.
- Confidence in the dollar will continue to decline.
- The corporation's gold and cryptocurrencies will become a safe haven for capital.
The list of "safe" assets can also include "classic" raw materials (the same materials, the demand for which will grow in the context of the industrial revolution).
This will be another test for Ukraine. Investments will decline again, unless, of course, Ukraine offers investors a strategy that will inspire them to park capital in Ukraine. So the adventure continues!