Charts of overall U.S. market cap relative to GDP are common, but this one focuses strictly on the NASDAQ's market cap relative to GDP (from former Reagan budget director David Stockman). Stockman, now a financial/economics newsletter writer, rarely likes what he sees in reckless government policy combined with stratospheric equity valuations. He's been on high alert for years, but it's getting harder to ignore. The chart showing how much higher the NASDAQ's market-value-to-GDP ratio is today versus 2000 — when it was considered the greatest equity bubble in U.S. history — is sobering.
A key "perp" behind ever-bigger asset bubbles has been the Fed. However, its new chairman seems highly cognizant of its complicity and is determined to break the cycle of enabling dangerous asset inflation.
(Title references Don Ho's "Tiny Bubbles," a song referenced in Hay's book "Bubble 3.0.")