A Perfect Configuration for Stock Market Growth
The MEGA Bull Run of 2025
Dear Investors,
There is a phenomenon that is quite interesting at the moment.
Many people are predicting a stock market crash, saying it’s too much, it’s too expensive, it’s too hot, it’s too much of what we want.
No, no, guys, we are in a perfect configuration for a stock market rise.
Yes, yes, that’s right.
I follow the whole world economically, I follow 40 countries, and the world is doing very well.
I don’t know what it will be in 6 months, but today it’s doing very well because global growth is picking up everywhere, almost everywhere, about 80–90% of the countries I follow.
So that means we are not in a period at the beginning of a recession, even in the United States, China, India, all the major countries, and even Europe is reacting.
It starts from very low and does very little, but it’s a little bit anyway.
So, in the end, since growth is accelerating, inflation, which had risen very violently 2 years ago, is falling and continues to fall.
And we see a drop in food prices.
It’s not just prices stabilizing; we see some adjustments.
So there is a real dynamic; there is a dynamic.
Now, there is a lot of debate about whether this dynamic will reverse or not.
There are indeed reasons to think that it could reverse; we can discuss it, it’s serious.
But today and throughout this year, inflation has not stopped decelerating.
So that means we are in an extraordinarily favorable situation for stocks since we have an acceleration of growth and a deceleration of inflation.
So normally, this is where good stock market rallies happen.
But there is another thing as well…
Gold Is Soaring
That’s very surprising because, for the economy to accelerate when everything is going well, gold usually doesn’t rise.
No, because normally when everything is going well, primary energy is not expensive.
When primary energy is not expensive, it can be easily transformed into goods and services, and that’s growth.
Today, primary energy is not expensive, but gold is at its peak.
So it’s very, very strange.
And obviously, primary energy, for example, oil and gold, over the long term, they return to the mean; they oscillate around the same value.
Both are energetic, so there are large oscillations like that.
But we are in a very particular situation; we are all the way down, meaning oil is not expensive at all, and gold is very expensive.
That’s a particular monetary configuration, and what does it mean?
It simply means that interest rates are too low.
That’s what it means.
This configuration, that’s how I interpret it, meaning that if interest rates were normal, you would have gold and energy following more or less the same trajectory.
But we have a decoupling, and this decoupling is linked to the fact that interest rates are too low.
Money is not remunerated; monetary savings are not remunerated enough.
While the economy is booming, that’s why we say it’s not remunerated enough because the market growth rate is superior to the money’s return rate.
Exactly, so not only is it not expensive enough, these rates are too low, but also the major central banks are in the process of cutting the rates, making them even cheaper, deflationary.
So, when you have an economic situation where it’s booming, and on top of that, the financing rates are not expensive, you can imagine that you have a period of a few months ahead of you, which is a second turbo.
It’s leverage on growth, and that’s what’s happening.
So I looked statistically over the last 50 years at what happens when we are in these configurations.
First, how often does it happen?
Well, it happens every few years; it covers about a quarter of the time, 25% of the time.
So it’s not very rare; it happens, but it happens at regular intervals like that.
And during these periods, stock markets make absolutely crazy rallies.
For example, and even more so, the stock markets of OECD countries, but emerging markets, it’s fantastic for them; it’s a party.
So that means returns of over 30% because they are not bothered by the price of the dollar; they are not bothered by the price of the dollar.
It’s also a moment when the dollar is accessible. So energy is accessible; money is not expensive.
And why is this money not expensive?
Logically, it should be more expensive, but it’s because it suits everyone for money not to be expensive, especially indebted governments.
So once again, we realize that external constraints play on the value of money.
After that, we feel that at some point, it’s going to get stuck anyway because if you regulate the rates normally, we agree that the interest rate is there to calibrate your bond market, so the speed of economic growth.
And in theory, you should calibrate the price of money to what your economy is capable of paying for your growth.
What we’re doing is making abysmal deficits, and besides, the nature of which is more than suspect.
And so, since the deficits are immense, to make them bearable, we are in the process of breaking the interest rate mechanism.
And that means that the markets will rise necessarily since the guys have money to pay.
We’re Going Into a Bubble
It’s scary, actually.
So obviously, from a fundamental point of view; it’s that we see that the constraint of over-indebted states leads to an adjustment of rates that is not good for the economy.
They are too low; the rates are too low.
That’s what I think, so it’s not good for the economy in the long term because obviously, it’s everything you say; we’re going into a bubble.
We have a risk of going into a bubble.
And for an investor, the risk today is not the collapse of the markets; it’s the bubble, the bull market, the bubble bull market.
So, that was the object of this research.
But for the guys who want to play the bull market, what is the signal of reversal?
Well, that will be, there will be several things.
It’s the rise in rates, so we could see it as a rise in rates.
It’s if suddenly the gold market starts to weaken, for example, and especially in relation to oil.
So it’s if suddenly there is a reversal.
We have to look at the progress less quickly than the money.
So, if the oil is not expensive; it’s at $70–75 per barrel.
It’s not expensive at all, especially with the inflation we had before.
It’s not the $75 of 10 years ago.
Of course, before the 2008 crisis, it had risen to $130, $140, $150. So we are really not expensive at all.
So that means if suddenly we see oil rising and especially expressed in gold, it means that we are no longer in a bubble situation.
It means that we are… So what we have to follow is whether this oil will break the $80 mark. We’ve been talking about $80 for months and months, and we’ve always been below it. And that’s what’s holding the markets.
If we see it rise to $80, $90, $95, then already that will be a stop on the growth.
And if at the same time, expressed in gold, it’s the opposite that happens, then we are completely out of the bubble. But for the possibility of a bubble, if you want the risk of a bubble, if you invest, it’s a very nice risk.
But that’s what I wanted to point out because there are many messages saying it’s too dangerous, it’s too expensive, etc.
I wanted to say, no, no, no, not at all.
As long as we have these configurations, it’s the opposite; it’s going well; it’s going very well.
The Return of Trump!
Two main scenarios have emerged: a bullish market driven by pro-business reforms or a historic crash due to overvalued markets and rising inflation caused by Trump’s policies.
For instance, look at Argentina under Milei’s liberal reforms — they propelled market indices upward.
Trump’s philosophy includes reducing taxes, cutting public spending, and making the country highly efficient — something I personally consider positive as a liberal.
A bullish market fueled by tax cuts for businesses and increased productivity with AI.
Personally, I lean toward a bullish market for now but remain cautious about a potential crash due to inflated valuations.
Trump’s policies aim to relocate manufacturing back to the U.S., heavily invest in infrastructure and key sectors, and support technological innovation while ignoring environmental concerns.
This focus on production at all costs could have severe consequences for our fragile planet.
Historically speaking, similar policies under Reagan in the 1980s led to massive economic growth but also carried risks such as inflation and market crashes.
Trump’s approach mirrors Reagan’s — deregulation, tax cuts, and prioritizing private-sector efficiency over government intervention.
However, risks remain: rising tariffs could trigger retaliatory actions from other countries; massive public spending could fuel inflation; and restrictive monetary policies might become necessary to control it.
The U.S.’s record debt levels could exacerbate these challenges.
For investors, it’s crucial to focus on momentum rather than fundamentals alone.
Markets with strong upward trends should be prioritized over weaker ones.
The music is playing, for now.
It’s playing both on the economy and on the money.
So, as long as the music is playing, you’ve got to get up and dance.
For now, we’re still dancing, and it’s going well.
We’re entering an extraordinary era with significant opportunities in financial markets.
That’s the conclusion.
Sincerely,
The Pareto Investor