$S&P 500(.SPX)$ $Invesco QQQ(QQQ)$ $SPDR S&P 500 ETF Trust(SPY)$ 💰📈🌀 When Liquidity Overpowers Valuation: The Buffett Indicator at 217% 💰📈🌀
I’m calling it clearly: we are living through the most liquidity-distorted market in modern history, with valuations at 217% of GDP and every major asset class at record highs, and I’m convinced this alignment will define the next great Wall Street cycle.
📊 Valuation at Extremes
The Buffett Indicator has climbed to 217% of GDP as of 30Jun25, sitting more than 2 standard deviations above the long-term trendline. That’s 69% higher than the historical norm. Whenever valuations have reached such extremes in the past: 2000’s dot-com peak or 2021’s liquidity surge, investors eventually faced a brutal reckoning.
✈️ Powell the Pilot
The paradox is that while valuations scream danger, liquidity keeps flooding in. Rate cuts are happening with CPI inflation still running at 4%, double the Fed’s official target. The image of Powell at the cockpit captures it: the system is flying on liquidity autopilot, with dollars raining down as fuel for every asset class.
📈 Milestones in Hyperdrive
The S&P 500 has just crossed 6,700 on 01Oct25; its 7th 100-point milestone this year. The cadence is accelerating; since July, each 100-point move has taken only 11–19 trading days. Including dividends, the S&P has now quadrupled in a decade. This isn’t a normal cycle; it’s liquidity-driven velocity.
🌐 A Perfect Storm of Highs
Stocks: all-time high
Home prices: all-time high
Bitcoin: all-time high
Gold: all-time high
Money supply: all-time high
National debt: all-time high
Inflation: double the Fed’s “target”
Every major financial asset is priced at records simultaneously. That has never happened before without consequences.
🧩 The Central Tension
Liquidity is rewriting the rules while valuations stretch past all known precedents. The question isn’t whether markets are overvalued, they are; it’s how long liquidity can delay gravity.
👉❓ If the Buffett Indicator is now at 217%: nearly twice fair value by Buffett’s own yardstick, are we entering a new era of structurally higher multiples, or simply setting up for the sharpest mean reversion in decades?
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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀
@Tiger_comments @TigerStars @TigerObserver @TigerPM @1PC
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- Kiwi Tigress·10-03TOPWhat really jumps out is how you showed the S&P quadrupling in a decade while Powell’s cutting into 4% CPI. That’s pure liquidity distortion and it makes sense why gold and Bitcoin are tagging along at highs. We’re in uncharted waters but it’s driven by policy not productivity2Report
- Hen Solo·10-03TOP🏦The perfect storm section hit me. Stocks, gold, Bitcoin, and homes all at records while debt keeps ballooning is a setup we’ve never seen. It feels like liquidity is driving everything higher, even defensive names like JNJ and consumer staples. Another interesting read thanks BC.3Report
- Cool Cat Winston·10-03TOPIt’s wild seeing valuations this stretched while Powell keeps cutting. The Buffett Indicator at 217% feels like déjà vu of 2000, only with AI flows pushing stocks like NVDA and MSFT into the stratosphere. Liquidity is rewriting the playbook for now.3Report
- Queengirlypops·10-03TOPThe Buffett Indicator screaming 217% while SPX smashes milestones this fast is crazy. It’s like the market’s just vibing off endless cash flow and ignoring gravity. I get why everyone’s piling into tech and crypto when the Fed’s basically on easy mode again 🧃1Report
