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2021-03-10

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The Equity-Gold Price Conundrum, Part 1: The Great Batsby<blockquote>股票黄金价格难题，第 1 部分：伟大的巴茨比</blockquote>

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{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":323792151,"tweetId":"323792151","gmtCreate":1615373252973,"gmtModify":1703488053322,"author":{"id":3575416215572570,"idStr":"3575416215572570","authorId":3575416215572570,"authorIdStr":"3575416215572570","name":"WilliamTeo","avatar":"https://static.tigerbbs.com/665764fc5f5e89c64f2caa13df0fe1e3","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":12,"crmLevelSwitch":0,"individualDisplayBadges":[],"wearingBadges":[],"fanSize":6,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","extraTitle":"","html":"<html><head></head><body>Go higher higher</body></html>","htmlText":"<html><head></head><body>Go higher higher</body></html>","text":"Go higher higher","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":3,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/323792151","repostId":1162030727,"repostType":4,"repost":{"id":"1162030727","kind":"news","pubTimestamp":1615371076,"share":"https://www.laohunote.com/m/news/1162030727?lang=zh_CN&edition=full","pubTime":"2021-03-10 18:11","market":"us","language":"en","title":"The Equity-Gold Price Conundrum, Part 1: The Great Batsby<blockquote>股票黄金价格难题，第 1 部分：伟大的巴茨比</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1162030727","media":"zerohedge","summary":"The relentless rally in equity markets has pushed valuations to extreme levels based on traditional ","content":"The relentless rally in equity markets has pushed valuations to extreme levels based on traditional metrics. In this report, we analyze the two common arguments made by equity bulls on why this time is different and current valuations are justified. We find that either gold or equities are currently mispriced, as, a) both arguments would imply that gold should outperform stocks and b) if neither of the scenarios play out, equities are due for a substantial correction.<blockquote>基于传统指标，股市的持续反弹已将估值推至极端水平。在这份报告中，我们分析了股票多头提出的两个常见论点，即为什么这次不同以及当前的估值是合理的。我们发现，目前黄金或股票的定价都被错误，因为a）这两种论点都意味着黄金的表现应该优于股票，b）如果这两种情况都没有发生，股票将出现大幅调整。</blockquote><img src=\"https://static.tigerbbs.com/95f7609bf84bf26bd5d2443fa9a7de86\" tg-width=\"500\" tg-height=\"445\" referrerpolicy=\"no-referrer\">Amidst the global COVID-19 pandemic, equities had staggering rally over the past 12 months. The S&amp;P500 almost doubled in less than a year from a low of 2240 on March 23, 2020 to currently 3860 at the time of writing. In addition, some narrower indices have done even better. Particularly certain technology stocks have relentlessly risen amidst an environment of economic stress.<blockquote>在全球 COVID-19 大流行的情况下，股市在过去 12 个月中出现了惊人的上涨。标准普尔 500 指数在不到一年的时间里几乎翻了一番，从 2020 年 3 月 23 日的低点 2240 点涨至撰写本文时目前的 3860 点。此外，一些较窄的指数表现甚至更好。尤其是某些科技股在经济压力的环境下无情上涨。</blockquote>This has led to a sharp increase in the equities-to-gold price ratio (see Exhibit 1) even as economic growth has collapsed while the Fed increased its balance sheet at an unprecedented level.<blockquote>这导致股票与黄金价格比率急剧上升（见图1），尽管经济增长已经崩溃，而美联储将其资产负债表扩大到前所未有的水平。</blockquote><img src=\"https://static.tigerbbs.com/a828b10b92375dfb19347e6c59314c83\" tg-width=\"500\" tg-height=\"405\" referrerpolicy=\"no-referrer\"><blockquote></blockquote>This increase in the equities-to-gold-ratio is not caused by gold performing poorly as prices for the yellow metal are up12% since the end of 2019. It’s simply a consequence of equities’ doing really well. But equity valuations according to traditional metrics have now approached extreme levels. For example, the total market cap to GDP (Buffet indicator) is currently at 193% (see exhibit 2), the highest on record, 50% above the peak during the dot.com bubble.<blockquote>股票与黄金比率的上升并不是由于黄金表现不佳造成的，因为自 2019 年底以来，黄金价格上涨了 12%。这只是股市表现良好的结果。但根据传统指标，股票估值现已接近极端水平。例如，总市值与 GDP（巴菲特指标）目前为 193%（见图 2），为有记录以来的最高水平，比互联网泡沫期间的峰值高出 50%。</blockquote><img src=\"https://static.tigerbbs.com/e64899d2c53b18cc97b2dce33717c9af\" tg-width=\"500\" tg-height=\"428\" referrerpolicy=\"no-referrer\">Moreover, global equities to GDP are also extremely high, currently at &gt;120% (see exhibit 3).<blockquote>此外，全球股票与GDP的比率也极高，目前超过120%（见图3）。</blockquote><img src=\"https://static.tigerbbs.com/ef426becc1777204ae2f18e3c290e2e6\" tg-width=\"500\" tg-height=\"436\" referrerpolicy=\"no-referrer\">The Cyclically Adjusted Price Earnings Ratio, or CAPE, a measure developed by Robert Schiller, is also flashing red with the second highest reading in history going back to the late 1900s (see exhibit 4).<blockquote>罗伯特·席勒 (Robert Schiller) 开发的周期调整市盈率 (CAPE) 也呈现红色，是 20 世纪末历史上第二高的读数（见图 4）。</blockquote><img src=\"https://static.tigerbbs.com/8cc92db52653acc17b59de9311c17bf0\" tg-width=\"500\" tg-height=\"442\" referrerpolicy=\"no-referrer\">Price to sales ratios also hit a record high (see Exhibit 5).<blockquote>市销率也创下历史新高（见图5）。</blockquote><img src=\"https://static.tigerbbs.com/a119fa360112d18ced5d8efff557ebea\" tg-width=\"500\" tg-height=\"436\" referrerpolicy=\"no-referrer\">There are other indicators that suggest that equity prices have detached from underlying fundamentals. The put / call ratio on the CBOE has now reached the levels of the dot.com bubble (see Exhibit 6).<blockquote>还有其他指标表明股票价格已脱离基本面。芝加哥期权交易所的看跌期权/看涨期权比率现在已经达到了网络泡沫的水平（见图6）。</blockquote><img src=\"https://static.tigerbbs.com/462aa5d4dee82e50792b2a4f6bbd70f8\" tg-width=\"500\" tg-height=\"389\" referrerpolicy=\"no-referrer\">We also saw an unprecedented inflow of new market participants. People with very little or no market exp4erience opened online brokerage accounts at an unprecedented speed during the global lockdowns. More than 10 million Americans opened a trading account in 2020 according to the Wall Street Journal.&nbsp; According to CNBC, ten percent of Americans bought a stock for the first time in the past 12 months, and a staggering twenty-two percent of Gen Z (currently 6-24 years old) opened a stock market account in the last 12 months.<blockquote>我们还看到前所未有的新市场参与者涌入。在全球封锁期间，几乎没有或没有市场经验的人以前所未有的速度开设了在线经纪账户。据《华尔街日报》报道，2020 年有超过 1000 万美国人开设了交易账户。据美国消费者新闻与商业频道（CNBC）报道，10% 的美国人在过去 12 个月中首次购买了股票，而 Z 世代（目前 6-24 岁）在过去 12 个月中开设了股票市场账户。</blockquote>And stocks are not the only assets that are skyrocketing. Cryptocurrencies, which since 2017 had temporarily lost their luster, are rallying at breakneck pace since the outbreak of the pandemic (see exhibit 7).<blockquote>股票并不是唯一飙升的资产。自2017年以来暂时失去光泽的加密货币，自疫情爆发以来正以惊人的速度反弹（见图7）。</blockquote><img src=\"https://static.tigerbbs.com/46a4f01c4a7404c0a7b196d39dac0a78\" tg-width=\"500\" tg-height=\"424\" referrerpolicy=\"no-referrer\">Judged on only those metrics, stock markets are clearly in a bubble. But is this time maybe really different as the bulls argue? In our view, there are only two ways that current stock prices could indeed be justified;<blockquote>仅从这些指标来看，股市显然处于泡沫之中。但这一次真的像多头所说的那样有所不同吗？在我们看来，只有两种方式可以证明当前的股价是合理的；</blockquote>1. The great Gatsby:The pandemic, as negative as it was for economic activity near term, will be followed by a period of unprecedented economic expansion. Hence, GDP will rapidly rise and close the gap to equity prices. 2. The great inflation:Stocks simply price in future inflation that eventually will come on the back of decades of ultra-low rates and central bank balance sheet expansionWe will take a close look at the validity of those scenarios below. As we will show, these scenarios would require that we enter a multi-year period of extreme economic growth or inflation or a mix of both.&nbsp; However, we will show that gold should outperform stocks in either scenario. And if neither scenario comes true, then stock markets are due for a substantial correction. In that scenario, we would expect central banks to eventually intervene, which should ultimately also benefit gold. Hence, the fact that stocks have vastly outperformed gold over the past months is somewhat of a conundrum. But we are confident that this will reverse going forward.<blockquote>1. 了不起的盖茨比：疫情虽然对近期经济活动不利，但随后将是一段前所未有的经济扩张期。因此，GDP将快速增长，缩小与股票价格的差距。2.大通货膨胀：股票只是在未来通货膨胀中定价，而未来通货膨胀最终将在几十年的超低利率和央行资产负债表扩张的背景下出现。我们将仔细研究下面这些情景的有效性。正如我们将展示的，这些情景将要求我们进入一个多年的极端经济增长或通货膨胀或两者混合的时期。然而，我们将表明，在这两种情况下，黄金的表现都应该优于股票。如果这两种情况都没有发生，那么股市将出现大幅调整。在这种情况下，我们预计央行最终会进行干预，这最终也会有利于黄金。因此，过去几个月股市的表现远远优于黄金的事实在某种程度上是一个难题。但我们相信这将扭转前进的局面。</blockquote>Scenario one: The great Gatsby<blockquote>场景一：了不起的盖茨比</blockquote>Proponents of the great Gatsby scenario argue that, once the COVID19 pandemic is behind us as enough people are vaccinated and normality returns, economic activity will explode. The argumentation goes that there is a lot of pent-up demand as people were forced to save during the lockdowns and are eager to consume. This demand will be further fueled by stimulus checks (potentially in perpetuity, UBI). At the same time, governments around the world are rolling out huge green infrastructure programs, partially to combat climate change and partially to jump-start the economy.<blockquote>了不起的盖茨比情景的支持者认为，一旦COVID19疫情随着足够多的人接种疫苗并恢复正常，经济活动将会爆炸式增长。有人认为，由于人们在封锁期间被迫储蓄，并渴望消费，因此有很多被压抑的需求。刺激检查（可能是永久性的，UBI）将进一步刺激这种需求。与此同时，世界各国政府正在推出庞大的绿色基础设施项目，部分是为了应对气候变化，部分是为了启动经济。</blockquote>While some of these deliberations have merit, there are a few important caveats. In our view, it is extremely unlikely for the economy to simply pick up where we left even if the current measures intended to contain the pandemic are completely removed. Many small businesses have closed forever or are about to close in the near term. The surviving businesses are aggressively cutting costs by a) laying off staff and b) trimming production. The former will impact on consumer demand going forward, the latter will impact on the businesses that are further up in the production chain. While there may be pent-up consumer demand from those who still have a job and saved a lot of money during lockdowns, there are also likely to be a lot of pent-up bankruptcies as many businesses have simply survived so far due to government intervention. Eventually many of those businesses will close. This is especially true in many European economies where governments de facto paid companies not to fire people.<blockquote>虽然其中一些考虑是有道理的，但也有一些重要的警告。我们认为，即使完全取消目前旨在遏制疫情的措施，经济也极不可能简单地从我们离开的地方回升。许多小企业已经永久关闭或即将关闭。幸存的企业正在通过a）裁员和b）削减产量来积极削减成本。前者将影响未来的消费者需求，后者将影响生产链上游的企业。虽然那些仍然有工作并在封锁期间存了很多钱的人可能会有被压抑的消费者需求，但也可能会有许多被压抑的破产，因为许多企业只是由于政府干预而幸存下来。最终这些企业中的许多将会关闭。在许多欧洲经济体中尤其如此，事实上，政府付钱给公司不要解雇员工。</blockquote>The problem is compounded by the fact that the economy was already stuttering long before Coronavirus became a household name. The Fed had to aggressively reverse its hiking cycle already by 3Q2019 as markets started to turn sour. We believe that we are close to or already in a recession by late 2019. Hence, a simple return to the pre-COVID economy would mean back to a “normal” recession. Thus, the drivers for this apparent future multi-year super growth cycle have to be strong enough to offset these bearish factors as well.<blockquote>早在冠状病毒成为家喻户晓的名字之前，经济就已经步履蹒跚，这一事实使问题更加复杂。随着市场开始恶化，美联储不得不在 2019 年第三季度积极逆转加息周期。我们认为，到2019年底，我们已经接近或接近衰退。因此，简单地回到科维德之前的经济就意味着回到 “正常 ”衰退。因此，未来这一明显的多年超级增长周期的驱动因素必须足够强大，才能抵消这些看跌因素。</blockquote>Then there is the magnitude by how much the economy would have to expand to justify these kind of equity valuations. If you take a simple metric like market cap to GDP, then GDP would have to almost double from current levels to be in line with historical averages. That implies a nominal GDP of $40tn, or 86% above the levels before COVID (average 2019). Granted that market cap to GDP was already inflated to around 1.2 on average in the ten years prior to the pandemic due to ultra-low interest rates, a return to that average would still require nominal GDP to rise to $35tn or 63% from pre-COVID levels.<blockquote>然后是经济必须扩张多少才能证明这种股票估值的合理性。如果你用像市值这样的简单指标来衡量GDP，那么GDP必须比当前水平几乎翻一番，才能与历史平均水平保持一致。这意味着名义GDP为40万亿美元，比新冠疫情之前的水平（2019年平均水平）高出86%。尽管由于超低利率，在疫情爆发前的十年里，市值与GDP的比率已经平均膨胀到1.2左右，但要恢复到这一平均水平，名义GDP仍需要从新冠疫情前的水平升至35万亿美元或63%。</blockquote>Even with a staggering 5% annual GDP growth and 2% inflation, it would still take more than seven years to get there. Are stocks really pricing in the year 2028 with 0% discount rate? And if so, what would be the fundamental driver to push stocks even higher from here? &nbsp;And is there even historic precedent for these kind of growth numbers? In the post WWII period, there have been only two instances where economic expansion was that high for a prolonged period (see Exhibit 8).<blockquote>即使GDP年增长率达到惊人的5%，通货膨胀率达到2%，也需要七年多的时间才能实现这一目标。股票真的在2028年以0%的折扣率定价吗？如果是这样，推动股市进一步走高的根本驱动力是什么？这种增长数字甚至有历史先例吗？在二战后时期，只有两次经济扩张在很长一段时间内如此之高（见图8）。</blockquote>After WWII ended, the US saw a few years of moderate growth as government spending plummeted, followed by very high growth rates at around 6.9% between 1949 and 1953. This was possible as the US was one of the very few countries where none of the infrastructure had been destroyed and the rest of the world had to be rebuilt. However mathematically, even a repetition of the 1949-53 growth period over the coming years would not be enough to justify current stock prices as it lasted for “only” four years before the US fell into another recession.<blockquote>二战结束后，随着政府支出急剧下降，美国经历了几年的温和增长，随后在1949年至1953年间实现了6.9%左右的非常高的增长率。这是可能的，因为美国是极少数几个基础设施没有被摧毁而世界其他地区必须重建的国家之一。然而，从数学角度来看，即使在未来几年重复 1949-53 年的增长期，也不足以证明当前股价的合理性，因为在美国再次陷入衰退之前，它 “只 ”持续了四年。</blockquote><img src=\"https://static.tigerbbs.com/e0e3916e88c1ee473c5ea235b229f969\" tg-width=\"500\" tg-height=\"420\" referrerpolicy=\"no-referrer\">From 1958-1969, the US economy was able to grow close to 5% with a brief monetary recession in 1960. In our view, this 1960s growth period is the only one that reflects the magnitude and length needed to get US GDP back in line with current equity prices. However, the economic environment of the 1960s looked very different from where we are now. More specifically, the US exited WWII with record debt to GPD of over 100%. However, it then immediately cut spending (which resulted in the slower growth rates in the immediate years after WWII) and reduced debt. Inflation also picked up, which, to some extent, helped reducing debt even further[1]. By 1959, the US government had reduced its debt held by the public to 44%, and it dropped to 27% by the end of the 60s (see exhibit 9).<blockquote>从1958年到1969年，美国经济能够增长接近5%，1960年经历了短暂的货币衰退。我们认为，20 世纪 60 年代的增长期是唯一一个反映了使美国 GDP 恢复到当前股票价格水平所需的规模和长度的时期。然而，20世纪60年代的经济环境看起来与我们现在非常不同。更具体地说，美国退出二战时对GPD的债务超过100%，创下了历史新高。然而，它随后立即削减开支（这导致二战后几年的增长率放缓）并减少债务。通货膨胀也有所上升，这在某种程度上有助于进一步减少债务[1]。到1959年，美国政府将公众持有的债务减少到44%，到60年代末，这一比例下降到27%（见图9）。</blockquote><img src=\"https://static.tigerbbs.com/4ee79afe5f74fa39abc86b197930c486\" tg-width=\"500\" tg-height=\"422\" referrerpolicy=\"no-referrer\">Additionally, 10-year treasury rates average at around 5% during this entire growth period. This is a stark contrast to the 1.5% we are seeing now (which already seem to rattle markets). Furthermore, the FED has no room to the downside, as Fed funds rates are already at zero percent. Hence, the only monetary stimulus that is left is via continued and even more extreme QE. However, as we have shown many times before (see&nbsp;Gold Price Framework Vol. 2: The energy side of the equation,&nbsp;28 May 2018), QE has always a huge and direct effect on gold prices, and gold is currently not pricing any of that in. Instead, the equity and gold markets seem to be pricing in economic expansion that is driven by anything but more monetary stimulus.<blockquote>此外，在整个增长期间，10年期国债利率平均约为5%。这与我们现在看到的 1.5% 形成了鲜明对比（这似乎已经让市场感到不安）。此外，美联储没有下行空间，因为联邦基金利率已经为零。因此，剩下的唯一货币刺激是通过持续甚至更极端的量化宽松。然而，正如我们之前多次展示的那样（参见黄金价格框架第2卷：等式的能量方面，2018年5月28日），量化宽松总是对金价产生巨大而直接的影响，而黄金目前并未对其中任何一项进行定价。相反，股市和黄金市场似乎在为经济扩张定价，而经济扩张并非由更多的货币刺激推动。</blockquote>Another theme of the great Gatsby scenario is that governments will unleash massive transformation towards a greener future. This will lead to huge infrastructure investments in energy, transportation and commodity space, create jobs and unlock economic growth. While we believe that this is likely to be true, what the market seems to ignore is that this can only be financed with more government debt. Central banks will ultimately have to buy that debt, which has the same effect as QE as it leads to a growing balance sheet. And as we have outlined before, higher QE leads to higher gold prices. So again, if markets are pricing in economic expansion on the back of a “green new deal”, they seem to wrongly assume that this can be done without an effect on gold price.<blockquote>了不起的盖茨比情景的另一个主题是，政府将向更绿色的未来发起大规模变革。这将导致能源、交通和商品领域的巨额基础设施投资，创造就业机会并释放经济增长。虽然我们认为这很可能是真的，但市场似乎忽略了这只能通过更多的政府债务来融资。央行最终将不得不购买这些债务，这与量化宽松具有相同的效果，因为它会导致资产负债表不断增长。正如我们之前概述的，更高的量化宽松会导致更高的金价。因此，如果市场在 “绿色新政 ”的支持下对经济扩张进行定价，那么它们似乎错误地认为这可以在不影响金价的情况下实现。</blockquote>Lastly, there is the idea that the COVID relief checks will continue indefinitely, de facto introducing a sort of Universal Basic Income (UBI). This would have an effect on consumer spending and, thus, corporate revenues. However, currently the US is running the largest deficit in history. If UBI becomes a reality, this would also have to be entirely financed via debt. As mentioned before, markets are not pricing this in, otherwise we would see an effect on gold.<blockquote>最后，有一种想法是，COVID救济支票将无限期地继续下去，事实上引入了一种全民基本收入（UBI）。这将对消费者支出产生影响，从而影响企业收入。然而，目前美国正面临历史上最大的赤字。如果UBI成为现实，这也必须完全通过债务融资。如前所述，市场没有对此进行定价，否则我们会看到对黄金的影响。</blockquote>Thus, the equity-gold conundrum doesn’t disappear in the great Gatsby scenario. In fact, we think that if we see strong economic growth over the coming years, it will entirely be debt financed and as a consequence gold should outperform stocks, not the other way around.<blockquote>因此，股票与黄金的难题并没有在《了不起的盖茨比》中消失。事实上，我们认为，如果我们看到未来几年强劲的经济增长，它将完全由债务融资，因此黄金的表现应该优于股票，而不是相反。</blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>The Equity-Gold Price Conundrum, Part 1: The Great Batsby<blockquote>股票黄金价格难题，第 1 部分：伟大的巴茨比</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThe Equity-Gold Price Conundrum, Part 1: The Great Batsby<blockquote>股票黄金价格难题，第 1 部分：伟大的巴茨比</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nzerohedge2021-03-10 18:11\n\n</h4>\n</header>\n<article>\nThe relentless rally in equity markets has pushed valuations to extreme levels based on traditional metrics. In this report, we analyze the two common arguments made by equity bulls on why this time is different and current valuations are justified. We find that either gold or equities are currently mispriced, as, a) both arguments would imply that gold should outperform stocks and b) if neither of the scenarios play out, equities are due for a substantial correction.<blockquote>基于传统指标，股市的持续反弹已将估值推至极端水平。在这份报告中，我们分析了股票多头提出的两个常见论点，即为什么这次不同以及当前的估值是合理的。我们发现，目前黄金或股票的定价都被错误，因为a）这两种论点都意味着黄金的表现应该优于股票，b）如果这两种情况都没有发生，股票将出现大幅调整。</blockquote><img src=\"https://static.tigerbbs.com/95f7609bf84bf26bd5d2443fa9a7de86\" tg-width=\"500\" tg-height=\"445\" referrerpolicy=\"no-referrer\">Amidst the global COVID-19 pandemic, equities had staggering rally over the past 12 months. The S&amp;P500 almost doubled in less than a year from a low of 2240 on March 23, 2020 to currently 3860 at the time of writing. In addition, some narrower indices have done even better. Particularly certain technology stocks have relentlessly risen amidst an environment of economic stress.<blockquote>在全球 COVID-19 大流行的情况下，股市在过去 12 个月中出现了惊人的上涨。标准普尔 500 指数在不到一年的时间里几乎翻了一番，从 2020 年 3 月 23 日的低点 2240 点涨至撰写本文时目前的 3860 点。此外，一些较窄的指数表现甚至更好。尤其是某些科技股在经济压力的环境下无情上涨。</blockquote>This has led to a sharp increase in the equities-to-gold price ratio (see Exhibit 1) even as economic growth has collapsed while the Fed increased its balance sheet at an unprecedented level.<blockquote>这导致股票与黄金价格比率急剧上升（见图1），尽管经济增长已经崩溃，而美联储将其资产负债表扩大到前所未有的水平。</blockquote><img src=\"https://static.tigerbbs.com/a828b10b92375dfb19347e6c59314c83\" tg-width=\"500\" tg-height=\"405\" referrerpolicy=\"no-referrer\"><blockquote></blockquote>This increase in the equities-to-gold-ratio is not caused by gold performing poorly as prices for the yellow metal are up12% since the end of 2019. It’s simply a consequence of equities’ doing really well. But equity valuations according to traditional metrics have now approached extreme levels. For example, the total market cap to GDP (Buffet indicator) is currently at 193% (see exhibit 2), the highest on record, 50% above the peak during the dot.com bubble.<blockquote>股票与黄金比率的上升并不是由于黄金表现不佳造成的，因为自 2019 年底以来，黄金价格上涨了 12%。这只是股市表现良好的结果。但根据传统指标，股票估值现已接近极端水平。例如，总市值与 GDP（巴菲特指标）目前为 193%（见图 2），为有记录以来的最高水平，比互联网泡沫期间的峰值高出 50%。</blockquote><img src=\"https://static.tigerbbs.com/e64899d2c53b18cc97b2dce33717c9af\" tg-width=\"500\" tg-height=\"428\" referrerpolicy=\"no-referrer\">Moreover, global equities to GDP are also extremely high, currently at &gt;120% (see exhibit 3).<blockquote>此外，全球股票与GDP的比率也极高，目前超过120%（见图3）。</blockquote><img src=\"https://static.tigerbbs.com/ef426becc1777204ae2f18e3c290e2e6\" tg-width=\"500\" tg-height=\"436\" referrerpolicy=\"no-referrer\">The Cyclically Adjusted Price Earnings Ratio, or CAPE, a measure developed by Robert Schiller, is also flashing red with the second highest reading in history going back to the late 1900s (see exhibit 4).<blockquote>罗伯特·席勒 (Robert Schiller) 开发的周期调整市盈率 (CAPE) 也呈现红色，是 20 世纪末历史上第二高的读数（见图 4）。</blockquote><img src=\"https://static.tigerbbs.com/8cc92db52653acc17b59de9311c17bf0\" tg-width=\"500\" tg-height=\"442\" referrerpolicy=\"no-referrer\">Price to sales ratios also hit a record high (see Exhibit 5).<blockquote>市销率也创下历史新高（见图5）。</blockquote><img src=\"https://static.tigerbbs.com/a119fa360112d18ced5d8efff557ebea\" tg-width=\"500\" tg-height=\"436\" referrerpolicy=\"no-referrer\">There are other indicators that suggest that equity prices have detached from underlying fundamentals. The put / call ratio on the CBOE has now reached the levels of the dot.com bubble (see Exhibit 6).<blockquote>还有其他指标表明股票价格已脱离基本面。芝加哥期权交易所的看跌期权/看涨期权比率现在已经达到了网络泡沫的水平（见图6）。</blockquote><img src=\"https://static.tigerbbs.com/462aa5d4dee82e50792b2a4f6bbd70f8\" tg-width=\"500\" tg-height=\"389\" referrerpolicy=\"no-referrer\">We also saw an unprecedented inflow of new market participants. People with very little or no market exp4erience opened online brokerage accounts at an unprecedented speed during the global lockdowns. More than 10 million Americans opened a trading account in 2020 according to the Wall Street Journal.&nbsp; According to CNBC, ten percent of Americans bought a stock for the first time in the past 12 months, and a staggering twenty-two percent of Gen Z (currently 6-24 years old) opened a stock market account in the last 12 months.<blockquote>我们还看到前所未有的新市场参与者涌入。在全球封锁期间，几乎没有或没有市场经验的人以前所未有的速度开设了在线经纪账户。据《华尔街日报》报道，2020 年有超过 1000 万美国人开设了交易账户。据美国消费者新闻与商业频道（CNBC）报道，10% 的美国人在过去 12 个月中首次购买了股票，而 Z 世代（目前 6-24 岁）在过去 12 个月中开设了股票市场账户。</blockquote>And stocks are not the only assets that are skyrocketing. Cryptocurrencies, which since 2017 had temporarily lost their luster, are rallying at breakneck pace since the outbreak of the pandemic (see exhibit 7).<blockquote>股票并不是唯一飙升的资产。自2017年以来暂时失去光泽的加密货币，自疫情爆发以来正以惊人的速度反弹（见图7）。</blockquote><img src=\"https://static.tigerbbs.com/46a4f01c4a7404c0a7b196d39dac0a78\" tg-width=\"500\" tg-height=\"424\" referrerpolicy=\"no-referrer\">Judged on only those metrics, stock markets are clearly in a bubble. But is this time maybe really different as the bulls argue? In our view, there are only two ways that current stock prices could indeed be justified;<blockquote>仅从这些指标来看，股市显然处于泡沫之中。但这一次真的像多头所说的那样有所不同吗？在我们看来，只有两种方式可以证明当前的股价是合理的；</blockquote>1. The great Gatsby:The pandemic, as negative as it was for economic activity near term, will be followed by a period of unprecedented economic expansion. Hence, GDP will rapidly rise and close the gap to equity prices. 2. The great inflation:Stocks simply price in future inflation that eventually will come on the back of decades of ultra-low rates and central bank balance sheet expansionWe will take a close look at the validity of those scenarios below. As we will show, these scenarios would require that we enter a multi-year period of extreme economic growth or inflation or a mix of both.&nbsp; However, we will show that gold should outperform stocks in either scenario. And if neither scenario comes true, then stock markets are due for a substantial correction. In that scenario, we would expect central banks to eventually intervene, which should ultimately also benefit gold. Hence, the fact that stocks have vastly outperformed gold over the past months is somewhat of a conundrum. But we are confident that this will reverse going forward.<blockquote>1. 了不起的盖茨比：疫情虽然对近期经济活动不利，但随后将是一段前所未有的经济扩张期。因此，GDP将快速增长，缩小与股票价格的差距。2.大通货膨胀：股票只是在未来通货膨胀中定价，而未来通货膨胀最终将在几十年的超低利率和央行资产负债表扩张的背景下出现。我们将仔细研究下面这些情景的有效性。正如我们将展示的，这些情景将要求我们进入一个多年的极端经济增长或通货膨胀或两者混合的时期。然而，我们将表明，在这两种情况下，黄金的表现都应该优于股票。如果这两种情况都没有发生，那么股市将出现大幅调整。在这种情况下，我们预计央行最终会进行干预，这最终也会有利于黄金。因此，过去几个月股市的表现远远优于黄金的事实在某种程度上是一个难题。但我们相信这将扭转前进的局面。</blockquote>Scenario one: The great Gatsby<blockquote>场景一：了不起的盖茨比</blockquote>Proponents of the great Gatsby scenario argue that, once the COVID19 pandemic is behind us as enough people are vaccinated and normality returns, economic activity will explode. The argumentation goes that there is a lot of pent-up demand as people were forced to save during the lockdowns and are eager to consume. This demand will be further fueled by stimulus checks (potentially in perpetuity, UBI). At the same time, governments around the world are rolling out huge green infrastructure programs, partially to combat climate change and partially to jump-start the economy.<blockquote>了不起的盖茨比情景的支持者认为，一旦COVID19疫情随着足够多的人接种疫苗并恢复正常，经济活动将会爆炸式增长。有人认为，由于人们在封锁期间被迫储蓄，并渴望消费，因此有很多被压抑的需求。刺激检查（可能是永久性的，UBI）将进一步刺激这种需求。与此同时，世界各国政府正在推出庞大的绿色基础设施项目，部分是为了应对气候变化，部分是为了启动经济。</blockquote>While some of these deliberations have merit, there are a few important caveats. In our view, it is extremely unlikely for the economy to simply pick up where we left even if the current measures intended to contain the pandemic are completely removed. Many small businesses have closed forever or are about to close in the near term. The surviving businesses are aggressively cutting costs by a) laying off staff and b) trimming production. The former will impact on consumer demand going forward, the latter will impact on the businesses that are further up in the production chain. While there may be pent-up consumer demand from those who still have a job and saved a lot of money during lockdowns, there are also likely to be a lot of pent-up bankruptcies as many businesses have simply survived so far due to government intervention. Eventually many of those businesses will close. This is especially true in many European economies where governments de facto paid companies not to fire people.<blockquote>虽然其中一些考虑是有道理的，但也有一些重要的警告。我们认为，即使完全取消目前旨在遏制疫情的措施，经济也极不可能简单地从我们离开的地方回升。许多小企业已经永久关闭或即将关闭。幸存的企业正在通过a）裁员和b）削减产量来积极削减成本。前者将影响未来的消费者需求，后者将影响生产链上游的企业。虽然那些仍然有工作并在封锁期间存了很多钱的人可能会有被压抑的消费者需求，但也可能会有许多被压抑的破产，因为许多企业只是由于政府干预而幸存下来。最终这些企业中的许多将会关闭。在许多欧洲经济体中尤其如此，事实上，政府付钱给公司不要解雇员工。</blockquote>The problem is compounded by the fact that the economy was already stuttering long before Coronavirus became a household name. The Fed had to aggressively reverse its hiking cycle already by 3Q2019 as markets started to turn sour. We believe that we are close to or already in a recession by late 2019. Hence, a simple return to the pre-COVID economy would mean back to a “normal” recession. Thus, the drivers for this apparent future multi-year super growth cycle have to be strong enough to offset these bearish factors as well.<blockquote>早在冠状病毒成为家喻户晓的名字之前，经济就已经步履蹒跚，这一事实使问题更加复杂。随着市场开始恶化，美联储不得不在 2019 年第三季度积极逆转加息周期。我们认为，到2019年底，我们已经接近或接近衰退。因此，简单地回到科维德之前的经济就意味着回到 “正常 ”衰退。因此，未来这一明显的多年超级增长周期的驱动因素必须足够强大，才能抵消这些看跌因素。</blockquote>Then there is the magnitude by how much the economy would have to expand to justify these kind of equity valuations. If you take a simple metric like market cap to GDP, then GDP would have to almost double from current levels to be in line with historical averages. That implies a nominal GDP of $40tn, or 86% above the levels before COVID (average 2019). Granted that market cap to GDP was already inflated to around 1.2 on average in the ten years prior to the pandemic due to ultra-low interest rates, a return to that average would still require nominal GDP to rise to $35tn or 63% from pre-COVID levels.<blockquote>然后是经济必须扩张多少才能证明这种股票估值的合理性。如果你用像市值这样的简单指标来衡量GDP，那么GDP必须比当前水平几乎翻一番，才能与历史平均水平保持一致。这意味着名义GDP为40万亿美元，比新冠疫情之前的水平（2019年平均水平）高出86%。尽管由于超低利率，在疫情爆发前的十年里，市值与GDP的比率已经平均膨胀到1.2左右，但要恢复到这一平均水平，名义GDP仍需要从新冠疫情前的水平升至35万亿美元或63%。</blockquote>Even with a staggering 5% annual GDP growth and 2% inflation, it would still take more than seven years to get there. Are stocks really pricing in the year 2028 with 0% discount rate? And if so, what would be the fundamental driver to push stocks even higher from here? &nbsp;And is there even historic precedent for these kind of growth numbers? In the post WWII period, there have been only two instances where economic expansion was that high for a prolonged period (see Exhibit 8).<blockquote>即使GDP年增长率达到惊人的5%，通货膨胀率达到2%，也需要七年多的时间才能实现这一目标。股票真的在2028年以0%的折扣率定价吗？如果是这样，推动股市进一步走高的根本驱动力是什么？这种增长数字甚至有历史先例吗？在二战后时期，只有两次经济扩张在很长一段时间内如此之高（见图8）。</blockquote>After WWII ended, the US saw a few years of moderate growth as government spending plummeted, followed by very high growth rates at around 6.9% between 1949 and 1953. This was possible as the US was one of the very few countries where none of the infrastructure had been destroyed and the rest of the world had to be rebuilt. However mathematically, even a repetition of the 1949-53 growth period over the coming years would not be enough to justify current stock prices as it lasted for “only” four years before the US fell into another recession.<blockquote>二战结束后，随着政府支出急剧下降，美国经历了几年的温和增长，随后在1949年至1953年间实现了6.9%左右的非常高的增长率。这是可能的，因为美国是极少数几个基础设施没有被摧毁而世界其他地区必须重建的国家之一。然而，从数学角度来看，即使在未来几年重复 1949-53 年的增长期，也不足以证明当前股价的合理性，因为在美国再次陷入衰退之前，它 “只 ”持续了四年。</blockquote><img src=\"https://static.tigerbbs.com/e0e3916e88c1ee473c5ea235b229f969\" tg-width=\"500\" tg-height=\"420\" referrerpolicy=\"no-referrer\">From 1958-1969, the US economy was able to grow close to 5% with a brief monetary recession in 1960. In our view, this 1960s growth period is the only one that reflects the magnitude and length needed to get US GDP back in line with current equity prices. However, the economic environment of the 1960s looked very different from where we are now. More specifically, the US exited WWII with record debt to GPD of over 100%. However, it then immediately cut spending (which resulted in the slower growth rates in the immediate years after WWII) and reduced debt. Inflation also picked up, which, to some extent, helped reducing debt even further[1]. By 1959, the US government had reduced its debt held by the public to 44%, and it dropped to 27% by the end of the 60s (see exhibit 9).<blockquote>从1958年到1969年，美国经济能够增长接近5%，1960年经历了短暂的货币衰退。我们认为，20 世纪 60 年代的增长期是唯一一个反映了使美国 GDP 恢复到当前股票价格水平所需的规模和长度的时期。然而，20世纪60年代的经济环境看起来与我们现在非常不同。更具体地说，美国退出二战时对GPD的债务超过100%，创下了历史新高。然而，它随后立即削减开支（这导致二战后几年的增长率放缓）并减少债务。通货膨胀也有所上升，这在某种程度上有助于进一步减少债务[1]。到1959年，美国政府将公众持有的债务减少到44%，到60年代末，这一比例下降到27%（见图9）。</blockquote><img src=\"https://static.tigerbbs.com/4ee79afe5f74fa39abc86b197930c486\" tg-width=\"500\" tg-height=\"422\" referrerpolicy=\"no-referrer\">Additionally, 10-year treasury rates average at around 5% during this entire growth period. This is a stark contrast to the 1.5% we are seeing now (which already seem to rattle markets). Furthermore, the FED has no room to the downside, as Fed funds rates are already at zero percent. Hence, the only monetary stimulus that is left is via continued and even more extreme QE. However, as we have shown many times before (see&nbsp;Gold Price Framework Vol. 2: The energy side of the equation,&nbsp;28 May 2018), QE has always a huge and direct effect on gold prices, and gold is currently not pricing any of that in. Instead, the equity and gold markets seem to be pricing in economic expansion that is driven by anything but more monetary stimulus.<blockquote>此外，在整个增长期间，10年期国债利率平均约为5%。这与我们现在看到的 1.5% 形成了鲜明对比（这似乎已经让市场感到不安）。此外，美联储没有下行空间，因为联邦基金利率已经为零。因此，剩下的唯一货币刺激是通过持续甚至更极端的量化宽松。然而，正如我们之前多次展示的那样（参见黄金价格框架第2卷：等式的能量方面，2018年5月28日），量化宽松总是对金价产生巨大而直接的影响，而黄金目前并未对其中任何一项进行定价。相反，股市和黄金市场似乎在为经济扩张定价，而经济扩张并非由更多的货币刺激推动。</blockquote>Another theme of the great Gatsby scenario is that governments will unleash massive transformation towards a greener future. This will lead to huge infrastructure investments in energy, transportation and commodity space, create jobs and unlock economic growth. While we believe that this is likely to be true, what the market seems to ignore is that this can only be financed with more government debt. Central banks will ultimately have to buy that debt, which has the same effect as QE as it leads to a growing balance sheet. And as we have outlined before, higher QE leads to higher gold prices. So again, if markets are pricing in economic expansion on the back of a “green new deal”, they seem to wrongly assume that this can be done without an effect on gold price.<blockquote>了不起的盖茨比情景的另一个主题是，政府将向更绿色的未来发起大规模变革。这将导致能源、交通和商品领域的巨额基础设施投资，创造就业机会并释放经济增长。虽然我们认为这很可能是真的，但市场似乎忽略了这只能通过更多的政府债务来融资。央行最终将不得不购买这些债务，这与量化宽松具有相同的效果，因为它会导致资产负债表不断增长。正如我们之前概述的，更高的量化宽松会导致更高的金价。因此，如果市场在 “绿色新政 ”的支持下对经济扩张进行定价，那么它们似乎错误地认为这可以在不影响金价的情况下实现。</blockquote>Lastly, there is the idea that the COVID relief checks will continue indefinitely, de facto introducing a sort of Universal Basic Income (UBI). This would have an effect on consumer spending and, thus, corporate revenues. However, currently the US is running the largest deficit in history. If UBI becomes a reality, this would also have to be entirely financed via debt. As mentioned before, markets are not pricing this in, otherwise we would see an effect on gold.<blockquote>最后，有一种想法是，COVID救济支票将无限期地继续下去，事实上引入了一种全民基本收入（UBI）。这将对消费者支出产生影响，从而影响企业收入。然而，目前美国正面临历史上最大的赤字。如果UBI成为现实，这也必须完全通过债务融资。如前所述，市场没有对此进行定价，否则我们会看到对黄金的影响。</blockquote>Thus, the equity-gold conundrum doesn’t disappear in the great Gatsby scenario. In fact, we think that if we see strong economic growth over the coming years, it will entirely be debt financed and as a consequence gold should outperform stocks, not the other way around.<blockquote>因此，股票与黄金的难题并没有在《了不起的盖茨比》中消失。事实上，我们认为，如果我们看到未来几年强劲的经济增长，它将完全由债务融资，因此黄金的表现应该优于股票，而不是相反。</blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.zerohedge.com/markets/equity-gold-price-conundrum-part-1-great-batsby?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohege%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29\">zerohedge</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://www.zerohedge.com/markets/equity-gold-price-conundrum-part-1-great-batsby?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohege%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1162030727","content_text":"The relentless rally in equity markets has pushed valuations to extreme levels based on traditional metrics. In this report, we analyze the two common arguments made by equity bulls on why this time is different and current valuations are justified. We find that either gold or equities are currently mispriced, as, a) both arguments would imply that gold should outperform stocks and b) if neither of the scenarios play out, equities are due for a substantial correction.Amidst the global COVID-19 pandemic, equities had staggering rally over the past 12 months. The S&P500 almost doubled in less than a year from a low of 2240 on March 23, 2020 to currently 3860 at the time of writing. In addition, some narrower indices have done even better. Particularly certain technology stocks have relentlessly risen amidst an environment of economic stress.This has led to a sharp increase in the equities-to-gold price ratio (see Exhibit 1) even as economic growth has collapsed while the Fed increased its balance sheet at an unprecedented level.This increase in the equities-to-gold-ratio is not caused by gold performing poorly as prices for the yellow metal are up12% since the end of 2019. It’s simply a consequence of equities’ doing really well. But equity valuations according to traditional metrics have now approached extreme levels. For example, the total market cap to GDP (Buffet indicator) is currently at 193% (see exhibit 2), the highest on record, 50% above the peak during the dot.com bubble.Moreover, global equities to GDP are also extremely high, currently at >120% (see exhibit 3).The Cyclically Adjusted Price Earnings Ratio, or CAPE, a measure developed by Robert Schiller, is also flashing red with the second highest reading in history going back to the late 1900s (see exhibit 4).Price to sales ratios also hit a record high (see Exhibit 5).There are other indicators that suggest that equity prices have detached from underlying fundamentals. The put / call ratio on the CBOE has now reached the levels of the dot.com bubble (see Exhibit 6).We also saw an unprecedented inflow of new market participants. People with very little or no market exp4erience opened online brokerage accounts at an unprecedented speed during the global lockdowns. More than 10 million Americans opened a trading account in 2020 according to the Wall Street Journal.  According to CNBC, ten percent of Americans bought a stock for the first time in the past 12 months, and a staggering twenty-two percent of Gen Z (currently 6-24 years old) opened a stock market account in the last 12 months.And stocks are not the only assets that are skyrocketing. Cryptocurrencies, which since 2017 had temporarily lost their luster, are rallying at breakneck pace since the outbreak of the pandemic (see exhibit 7).Judged on only those metrics, stock markets are clearly in a bubble. But is this time maybe really different as the bulls argue? In our view, there are only two ways that current stock prices could indeed be justified;1. The great Gatsby:The pandemic, as negative as it was for economic activity near term, will be followed by a period of unprecedented economic expansion. Hence, GDP will rapidly rise and close the gap to equity prices. 2. The great inflation:Stocks simply price in future inflation that eventually will come on the back of decades of ultra-low rates and central bank balance sheet expansionWe will take a close look at the validity of those scenarios below. As we will show, these scenarios would require that we enter a multi-year period of extreme economic growth or inflation or a mix of both.  However, we will show that gold should outperform stocks in either scenario. And if neither scenario comes true, then stock markets are due for a substantial correction. In that scenario, we would expect central banks to eventually intervene, which should ultimately also benefit gold. Hence, the fact that stocks have vastly outperformed gold over the past months is somewhat of a conundrum. But we are confident that this will reverse going forward.Scenario one: The great GatsbyProponents of the great Gatsby scenario argue that, once the COVID19 pandemic is behind us as enough people are vaccinated and normality returns, economic activity will explode. The argumentation goes that there is a lot of pent-up demand as people were forced to save during the lockdowns and are eager to consume. This demand will be further fueled by stimulus checks (potentially in perpetuity, UBI). At the same time, governments around the world are rolling out huge green infrastructure programs, partially to combat climate change and partially to jump-start the economy.While some of these deliberations have merit, there are a few important caveats. In our view, it is extremely unlikely for the economy to simply pick up where we left even if the current measures intended to contain the pandemic are completely removed. Many small businesses have closed forever or are about to close in the near term. The surviving businesses are aggressively cutting costs by a) laying off staff and b) trimming production. The former will impact on consumer demand going forward, the latter will impact on the businesses that are further up in the production chain. While there may be pent-up consumer demand from those who still have a job and saved a lot of money during lockdowns, there are also likely to be a lot of pent-up bankruptcies as many businesses have simply survived so far due to government intervention. Eventually many of those businesses will close. This is especially true in many European economies where governments de facto paid companies not to fire people.The problem is compounded by the fact that the economy was already stuttering long before Coronavirus became a household name. The Fed had to aggressively reverse its hiking cycle already by 3Q2019 as markets started to turn sour. We believe that we are close to or already in a recession by late 2019. Hence, a simple return to the pre-COVID economy would mean back to a “normal” recession. Thus, the drivers for this apparent future multi-year super growth cycle have to be strong enough to offset these bearish factors as well.Then there is the magnitude by how much the economy would have to expand to justify these kind of equity valuations. If you take a simple metric like market cap to GDP, then GDP would have to almost double from current levels to be in line with historical averages. That implies a nominal GDP of $40tn, or 86% above the levels before COVID (average 2019). Granted that market cap to GDP was already inflated to around 1.2 on average in the ten years prior to the pandemic due to ultra-low interest rates, a return to that average would still require nominal GDP to rise to $35tn or 63% from pre-COVID levels.Even with a staggering 5% annual GDP growth and 2% inflation, it would still take more than seven years to get there. Are stocks really pricing in the year 2028 with 0% discount rate? And if so, what would be the fundamental driver to push stocks even higher from here?  And is there even historic precedent for these kind of growth numbers? In the post WWII period, there have been only two instances where economic expansion was that high for a prolonged period (see Exhibit 8).After WWII ended, the US saw a few years of moderate growth as government spending plummeted, followed by very high growth rates at around 6.9% between 1949 and 1953. This was possible as the US was one of the very few countries where none of the infrastructure had been destroyed and the rest of the world had to be rebuilt. However mathematically, even a repetition of the 1949-53 growth period over the coming years would not be enough to justify current stock prices as it lasted for “only” four years before the US fell into another recession.From 1958-1969, the US economy was able to grow close to 5% with a brief monetary recession in 1960. In our view, this 1960s growth period is the only one that reflects the magnitude and length needed to get US GDP back in line with current equity prices. However, the economic environment of the 1960s looked very different from where we are now. More specifically, the US exited WWII with record debt to GPD of over 100%. However, it then immediately cut spending (which resulted in the slower growth rates in the immediate years after WWII) and reduced debt. Inflation also picked up, which, to some extent, helped reducing debt even further[1]. By 1959, the US government had reduced its debt held by the public to 44%, and it dropped to 27% by the end of the 60s (see exhibit 9).Additionally, 10-year treasury rates average at around 5% during this entire growth period. This is a stark contrast to the 1.5% we are seeing now (which already seem to rattle markets). Furthermore, the FED has no room to the downside, as Fed funds rates are already at zero percent. Hence, the only monetary stimulus that is left is via continued and even more extreme QE. However, as we have shown many times before (see Gold Price Framework Vol. 2: The energy side of the equation, 28 May 2018), QE has always a huge and direct effect on gold prices, and gold is currently not pricing any of that in. Instead, the equity and gold markets seem to be pricing in economic expansion that is driven by anything but more monetary stimulus.Another theme of the great Gatsby scenario is that governments will unleash massive transformation towards a greener future. This will lead to huge infrastructure investments in energy, transportation and commodity space, create jobs and unlock economic growth. While we believe that this is likely to be true, what the market seems to ignore is that this can only be financed with more government debt. Central banks will ultimately have to buy that debt, which has the same effect as QE as it leads to a growing balance sheet. And as we have outlined before, higher QE leads to higher gold prices. So again, if markets are pricing in economic expansion on the back of a “green new deal”, they seem to wrongly assume that this can be done without an effect on gold price.Lastly, there is the idea that the COVID relief checks will continue indefinitely, de facto introducing a sort of Universal Basic Income (UBI). This would have an effect on consumer spending and, thus, corporate revenues. However, currently the US is running the largest deficit in history. If UBI becomes a reality, this would also have to be entirely financed via debt. As mentioned before, markets are not pricing this in, otherwise we would see an effect on gold.Thus, the equity-gold conundrum doesn’t disappear in the great Gatsby scenario. In fact, we think that if we see strong economic growth over the coming years, it will entirely be debt financed and as a consequence gold should outperform stocks, not the other way around.","news_type":1,"symbols_score_info":{}},"isVote":1,"tweetType":1,"viewCount":625,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":14,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/323792151"}