The central banks poked the rational price bubble.
(Photo: dpa)
Price bubbles belong to the stock market like the devil to holy water. They are evil par excellence, but with which a pact can be concluded for a limited period of time, as Goethe’s Faust once did. After the tremendous price recovery since the Corona outbreak, the question that arises more and more urgently is: How much hot air is there in the markets?
A small typology of bubbles may help. Most of them are irrational, but we have been experiencing a rational bubble for a good decade, so one with understandable reasons: The low interest rates are driving up the prices of bonds and stocks at the same time.
The central banks will poke this bubble in the coming year and try to avoid a bang in the process. If inflation remains even more persistent than recently feared, there is a greater risk that they will take hectic countermeasures and at least it will hiss loudly.
Perhaps the largest amount of hot air could be in the e-car bubble. Anyone who can put together a Stromer should now go public quickly. Part of this is a tech bubble. But maybe even more about a charismatic bubble.
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Tesla founder Elon Musk did not invent the e-car, but a picture of a 120-year-old French share in an e-car company is currently circulating on Twitter. But the way Musk made the idea “cool” and then sold it is innovative. Nevertheless: Charisma alone cannot be the basis for a completely exaggerated evaluation in the long run. In a few years, electric cars from all sorts of manufacturers will be rolling on the streets.
Master of Ceremonies of the Bitcoin Bubble
With his tweets, Musk is also a kind of master of ceremonies of the Bitcoin bubble. One could speak of an ideological bubble here. In the meantime, a lot of unideological investors and speculators are getting into the business. But without the anarcho-tech ideology, according to which one would rather trust energy-guzzling software than public institutions, this bubble would probably hardly be able to be kept in shape in the long term. It could well remain with us for a while longer: after all, man is faith, his ideology, his kingdom of heaven.
The question remains: Has a tech bubble inflated as dangerously on the stock exchanges as it did 20 years ago?
No. Back then, with interest rates high, companies were celebrated for burning cash. The irony here is that the instinct at the time that the Internet would become a huge money machine ultimately came true. But only after the first bubble burst with a loud bang.
More: These crazy trades produced huge profits in 2021.