Not this year, or next… but the end is coming.
Like to use stocks as an investment tool? Well you’ve got about 25 years until it all comes crashing down, according to a new research report.
Klaus Grosby, a Finnish economics professor and researcher from the University of Vaasa, sounded the alarm in a recent paper called “Armageddon of Financial Markets: Is the U.S. equity market eventually going to collapse?”
In the paper, Grosby says that U.S. stock growth is unsustainable and is destined to crash by 2050.
“A well-established fact, documented in the physics literature, is that faster-than-exponential growth is not sustainable in the long-term and will eventually result in what physicists typically term a “finite-time singularity,” Grosby says in the study.
Using predictive models, Grosby says there is a “95% confidence interval” for the devastating market crash to occur sometime between December 2043 and December 2050.
To come to this conclusion, Grosby analyzed monthly S&P 500 data between January 1871 and November 2022. He also added in daily data from the S&P between January 2, 1980 and December 31, 1986 as well as daily data from the Dow Jones period between June 1, 1921 and December 31, 1928.
He then used a “simple power-law model” for financial log prices and calculated away.
Beep, bop, boop … his equations led him to the finite-time singularity of total implosion by 2050 at the latest, with different models showing “virtually indistinguishable” results despite using different data, different samples, and different estimation approaches.