By Rinaldo S. Brutoco
March 19, 2026
On December 5, 1996, then Federal Reserve Board Chairman Alan Greenspan gave a speech in which he coined the term “irrational exuberance” to describe the valuations in the stock market which had passed all reasonable comparisons to historical ratios. He warned the markets that the prices of stock were artificially high in terms of historical averages of stock prices to earnings. He wanted the market to cool down on the prices being paid for shares to bring it back into normal historical ratios (e.g. a price of 15 times higher than earnings). He wanted the market to know that, in his opinion, the prices than being paid per share were based on unfounded or excessive enthusiasm in the hope of much higher future profits—higher than was even optimistically possible.
Today, the situation is far more extreme. Skyrocketing valuations, particularly in the tech sector, make the excesses of the 1990s look modest by comparison.
Throughout 2025, the Academy urged its Members to exit the equity markets and alternatively place their investments in a safer store of value. The Academy’s position was straight forward: gold might not deliver dramatic gains, but in an environment of rising inflationary pressures and increasing political instability, it would preserve value far better than equities. In fact, that proved to be prescient as gold did rise 83% in 2025 and the equity markets only rose by 45%.
And if you missed that run-up, do not assume the opportunity has passed. The Academy believes this trend will continue. Yes, you read that correctly. We expect gold will hold its own or grow substantially this year potentially passing $6,000/Troy ounce, while the stock market experiences a serious correction.
Even more troubling, however, is what appears to be going on in the bond market.
Several months ago, the Academy reported comments from the CEO of JP Morgan Chase, Jamie Dimon, who warned that the bond market might “crack”—that is, suffer a sharp and sudden decline. Add to that the column released this week by the respected founder of Bridgewater Associates, Ray Dalio, that losing the Iran War would trigger a U.S. bond market collapse. In that same analysis he detailed the incredible destruction such an event will have on U.S. and global financial markets.
The troubling reality, as I wrote to Mr. Dalio immediately upon reading his column, is that the U.S. has already lost the war.
For a full explanation of why the Academy has reached this conclusion – and what it means for investors—we invite you, and strongly suggest, you attend the next Brutoco Briefing, scheduled for April 9th at 12:00pm PST.
Unfortunately, the phrase “Irrational Exuberance” no longer captures the magnitude of the danger we now face.