We thought that Jeremy Siegel, Laszlo "the Ruler" Birinyi and Jim Altucher
were optimistic with their stock market targets. Sadly, with their equal to or
less than 20,000 Dow Jones predictions, the three merely come off as rank
amateurs, especially when compared to the forecast of BNP's head of fixed income
Philippe Gijesels, who sees the stock market at 100,000 at some point over the
next 25 years. However, unlike the previous trio who bases its forecasts on
misguided expectations of economic growth, Gijesels may actually end up being
right, because his estimate is predicated on one simple thing: hyperinflation,
or specifically 12.2% inflation each year, which for a country
like America is tantamount to the dreaded H-word. The other premise used by
Gijesels: too much debt which has to be inflated. And actually, he is spot on.
The only problem is that when the Dow hits 100,000 due to money printing, which
is his underlying thesis, one will needed scientific notation to express the
price of any hard asset (and most certainly gold), because if America falls in a
two-decade long Weimar republic phase, the Dow may well be 100,000 or 100 googol
- the truth is it won't matter as the money this number translated to would be
absolutely meaningless. Just ask the Weimar Germans, who may have had some
tremendous monthly increases in their 401(k) statements, but all they really
cared about is whether they had the latest and most fashionable wheelbarrow
model.
No comments:
Post a Comment