Robert Shiller, the Nobel Laureate in economics from Yale University, has a cyclically-adjusted price-earnings ratio termed the CAPE ratio. And it just rose to the same level as Black Tuesday of 1929, the famous stock market crash.

The Federal Reserve, after months of lowering their target rate, waited until after the November 2008 election of Obama to cut the rate a final time and did not raise their target rate again until December 2015. But since the November 2016 election of Trump, The Fed has raised its benchmark rate 3 times.

With such staggering monetary stimulus, it is not surprising that the S&P500 index has experienced such a fantastic run despite poor wage growth.

Nothing has been the same for Gold since QE3.

Let’s see if The Fed raises their benchmark rate again. But the implied probability of a rate hike before March 21, 2018 is less than 50% (with zero probability of a rate hike at the July 26th meeting, growing to 40% for the December FOMC meeting).

Here is a picture of The Good Ship Follypop.

Yes, Shiller’s CAPE (Fear) index is at 1929 Black Tuesday levels.