Crash Alert: Priced for Perfection in an Imperfect World

By John Rubino, John Rubino’s Substack

The last few US inflation reports have been ominous, with the general trend morphing from sharp decline to gradual increase. Here’s the Core Services index, which is now rising at a 4% annual rate:

Stocks, meanwhile, are priced for perfection, with the second highest price/earnings ratio on record:

Investors are getting cocky, as evidenced by the soaring popularity of leveraged ETFs:

And gold has shaken off its post-election correction and is now threatening its all-time-high:

Can the Fed keep easing into all this?

Today’s stock market enthusiasm is based in part on the expectation of ever-easier money for the balance of the decade. But can the Fed really deliver this in the face of soaring financial assets, off-the-charts speculation, and rising general inflation? Wouldn’t that spike inflation? Probably. So at some point in 2025 the Fed will have to stop lowering rates.

What happens then? Well, check the above P/E chart for what became of the last few priced-for-perfection markets.

By John Rubino, John Rubino’s Substack

The last few US inflation reports have been ominous, with the general trend morphing from sharp decline to gradual increase. Here’s the Core Services index, which is now rising at a 4% annual rate:

Stocks, meanwhile, are priced for perfection, with the second highest price/earnings ratio on record:

Investors are getting cocky, as evidenced by the soaring popularity of leveraged ETFs:

And gold has shaken off its post-election correction and is now threatening its all-time-high:

Can the Fed keep easing into all this?

What happens then? Well, check the above P/E chart for what became of the last few priced-for-perfection markets.

Unlike supply-and-demand issues, debasement of fiat money — worldwide, mind you — will drive prices across the entire commodity space.

Same-store spending has picked up all through the hand-wringing over “affordability” leading into the midterms

After leading stocks for most of 2026, the sell-off in the semiconductor space has taken off. But there’s another key component to the story.

Uranium is one of many oversold sectors. But when commodity stocks get oversold, the move higher tends to be strong…

Unlike supply-and-demand issues, debasement of fiat money — worldwide, mind you — will drive prices across the entire commodity space.

Same-store spending has picked up all through the hand-wringing over “affordability” leading into the midterms

After leading stocks for most of 2026, the sell-off in the semiconductor space has taken off. But there’s another key component to the story.

Uranium is one of many oversold sectors. But when commodity stocks get oversold, the move higher tends to be strong…