|Japan Owns 20% of the US Treasury Debt or $885 Billion|
I happen to be one of the few people that believe the market has been artificially propped up by the Fed buying bonds in the open market. This cash gets invested back in the markets in order to prop up equity prices. I am all for capitalism and organic growth but the current run up in bond and equity prices have not been commensurate with the level of growth and unemployment.
Why am I worried about this as an early stage investor? Well, because I don't believe that our growth has been created organically by capital formation and venture capital. Our industry is still shrinking drastically. The day that the VC industry starts to expand in the US I will be the first person to claim we are in a real bull market for an extended period of time. However, for the time being I am bearish until the government can get out of way with regards to financial regulation and the government restructures their balance sheets to fit the private sector drop in wealth.