Goldman Sachs believes stocks will outperform bonds in the next 12 months, which Warren Buffett doesn't like, who warned that the market is overvalued relative to the global economy. Where does Bitcoin fit into all of this?
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Goldman Sachs believes stocks will outperform bonds in the next 12 months, which Warren Buffett doesn't like, who warned that the market is overvalued relative to the global economy. Where does Bitcoin fit into all of this? |
Goldman Sachs is pushing stocks over bonds despite extremely high valuations in the stock markets. Over the next 12 months, the investment giant predicts stocks "are likely to outperform bonds," based on the equity risk premium (ERP), which is currently at an all-time high.
While a high ERP indicates better returns on stocks than on bonds, that doesn't necessarily mean a surge in the stock market. Goldman Sachs' valuation does not seem to take into account government intervention since March, which has kept interested below zero and artificially inflated the market.
Since the COVID-19 market crash, global stocks have withdrawn 99% of their losses due to coronavirus, but many economists are concerned about the growing size of US debt and the fact that federal government debt is on the way to exceed 100% of GDP. greater than any period since World War II. A recent study by the National Association of Business Economists (NABE) found that most economists believe the chance of a double recession is 25 percent.
As disastrous as the impact of a double-dip recession on stock markets, the price of Bitcoin, which is currently struggling to hit $ 12,000, could be taken to new levels as the world's largest cryptocurrency.
The buffet display shows inflation along the way
Warren Buffet, while not yet a Bitcoin supporter, said the U.S. stock market is currently at dot-com bubble levels, using the Buffett indicator, which divides the Wilshire 5000 index by GDP. American. The USA, which could be another uptrend. Signal for the uncorrelated Bitcoin price.Warren Buffett's most popular market measure hit a 30-month high in early August, which shows that global stocks are overvalued and may be the result of a major correction. Stocks have benefited from aggressive intervention by the Federal Reserve and global governments and central banks to rescue businesses and support markets.
The Federal Reserve has already announced that it will soon introduce higher than usual inflation rates, which is necessary at this point to prevent the US dollar from deteriorating completely.
Galaxy Digital CEO Mike Novogratz tweeted after the Federal Reserve's inflation announcement:
Companies are already protectingIt seems that big corporations and Wall Street investors aren't taking Goldman Sachs' forecast for a booming stock market too seriously.
Wall Street investors anticipate that the stimulus packages will end after business day and that investors will look for assets like bitcoin and gold that are beyond the control of the government.
In the past few weeks, some large companies and investors have stepped into the Bitcoin arena and supported the safe-haven asset. Analysis on the map also showed a massive surge in bitcoin whales in preparation for the Federal Reserve's announcement. Data shows that there are now over 2,000 wallets with over 1,000 BTC, which is over $ 90 billion. Dollars in BTC for a long time. - limited investments.
The coming inflation has been predicted by investors like Jim Rogers, who warned in a recent interview that efforts by global central banks to boost their respective economies by creating billions of dollars in foreign currency amid the COVID disruption will end badly.