Billionaire investor Leon Cooperman says Fed relief efforts have created a ‘speculative bubble’

Business Insider/Emily Graffeo

“Wall Street legend Leon Cooperman told Bloomberg on Monday that the Fed has created a ‘real speculative bubble.’ The hedge fund manager said he’s ‘uncomfortable’ at the moment because the market is not focused on the amount of debt being created in the nation. Cooperman emphasized that the US has piled up $21 trillion of debt in its 244 years, and said it will probably end 2020 with $27 trillion in debt.”

USAGOLD note:  The markets are ignoring quite a few warning signs, but the level of federal debt is one old school investment advisors like Cooperman like to devote a high level of attention – and for good reason.  Here is an interesting chart that shows the long-term inverse correlation between the purchasing of the dollar and the accumulation of federal debt.  You could add the gold price to this chart and it would roughly follow the growth of the accumulated debt.

overlay area chart showing the relationship between the national debt and the value of the dollar

Chart courtesy of the St. Louis Federal Reserve [FRED]

Repost from 8-26-2020

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