The 20-minute flights into space by several billionaires and actor William Shatner sparked interest in space investing. Yet Bernstein questions why more people aren’t interested in allocating capital to supply-chain logistics and software, given the glaring problem at ports around the world as economies struggle to reopen.

Misguided central bank policy is the root cause of the bubble in long-duration assets, he said, although Fed Chairman Jerome Powell has said the central bank doesn’t control the long end of the yield curve.

That’s a pretty strange take on the bond market, given that the Fed owned between 50% and 55% of all 10- to 20-year Treasury bonds at various junctures over the last decade. “The Fed distorted the yield curve to stimulate the economy” after the Great Financial Crisis left many houses worth less than their mortgages, constricting consumer demand. But in Bernstein’s view, the Fed misfired and fueled a boom in assets like tech stocks and venture capital.

Back in the late 1990s investors were bombarded with stories saying the internet would radically change the economy. “It did,” Bernstein noted, “but if you bought the Nasdaq in 1999, it took 14 years to get back to breakeven.”

Bernstein recalled being asked by a colleague after a small tech rally in July 2000 if tech stocks had hit bottom. He told the colleague that tech stocks would “hit bottom when you stop asking me that question.”

Cryptocurrencies have failed to provide a hedge in recent months against either inflation or falling stock prices. Many see them as a hedge against central bank money printing or Modern Monetary Theory (MMT).

The problem is “people can’t separate the story from the valuation of the asset,” Bernstein explained.

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