Churchill Management Group's June investment commentary draws parallels between the strategies used by central bankers and the government today and during the 1920s.
"Today, our biggest concern is the big picture. Could the low interest rate environment created by accommodative central banks extend the Bull Market? The concern is that the current market background could be laying the seeds for a potential “bubble”. When asset prices are artificially increased, the ride up can be fun and rewarding, but we have learned from the past that a bubble usually ends rather painfully. History is littered with examples of bubbles and crashes. The Roaring 20's led to the Great Depression. The Tech bubble of the 1990's saw the Nasdaq fall over 80% from 2000-2002, and most recently we had the housing bubble burst, causing the Great Recession in 2007-2008."