Electric, Digital and Dutch Tulips

by David Kranzler
Investment Research Dynamics

The market value of all outstanding bitcoin has risen $580bn since the start of last year, hitting a new record this week of more than $700bn. That closely matches the trajectory of Tesla: the electric car maker has added $670bn in market cap in the same period, and is now valued at $750bn…as each soars towards $1tn, they look like the clearest examples of the pandemic era’s spreading financial bubbles. – Financial Times, “Pandemic tech bubbles echo those of the dotcom era”

Bitcoin and TSLA have gone parabolic, just like tulip prices in the 1600’s. The charts above epitomize the degree to which the current stock market is in a massive bubble, the scale of which is considerably larger than the dot.com bubble. The M2 measure of the money supply is nearly 4x greater now than at the end of 1999, yet real GDP has grown just 40% over the same time period. Nominal GDP has only doubled.

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