QUESTION: I requested GOK who thinks the inventory market will crash. It gave a listing of individuals all anticipating a crash. It additionally famous that Buffet was bearish and J.P. Morgan was calling for a 20% drop. The explanations have been “High valuations, particularly in tech and AI, are compared to historical bubbles (e.g., dot-com, railroads). Recession fears, driven by tariffs, high interest rates, and consumer debt, are seen as potential catalysts. Ongoing conflicts (e.g., Middle East, Russia-Ukraine) and trade policy shifts add volatility.”
It even mentioned:
“Samuel Benner’s Historic Chart (Referenced on Medium):
Prediction: A 150-year-old monetary cycle chart by Samuel Benner, cited in a Medium article, has traditionally predicted main crashes, together with the Nice Melancholy, dot-com bust, and 2020 COVID crash. It suggests warning indicators for a possible crash in 2025.”
You appear to be standing alone. What do you consider the Benner chart?
SY
ANSWER: That’s good. The bulk is all the time unsuitable. Simply as Rogoff mentioned, the forecasts at Davos are all the time unsuitable. Most of those folks forecast markets based mostly on private opinion, they usually are typically very myopic. They don’t have a look at the world as a result of they imagine they will forecast in isolation.
Benner was a farmer. Making use of his cycle to the financial system at present is now not efficient, any greater than the Kondratieff Wave. Each have been based mostly on the financial system, with agriculture being the #1 sector. Because the Industrial Revolution unfolded, these cycles stay related for commodities, however not the financial system. Agriculture, when Benner developed his mannequin, accounted for 53% of the financial system. Right this moment it’s 3%. In the event that they have been alive at present, they’d have used the providers business. Capital flows are nonetheless pointing to the greenback, given the prospect of conflict and sovereign defaults outdoors the USA.
