What country do you think has had the fastest growing stock market in the world over the last12 months?

Is it the united states? Well thats a good guess, as the stock market has seen gains of more than 50% in the last 12 months, which is about 41% more than normal.

How about china? Well, the shanghai composite index has done well, growing by over 25% in the last 12 months, which is about 20% higher than its normal year.


Or what about Japan? Well, they’ve seen their stock market grow by about 50% over the last 12 months, which is about 45% higher than normal.


Yet...despite all of these countries having record amounts of growth in their own stock markets, they all pale in comparison to that of zimbabwe.

You see, if you had invested in the Zimbabwe Industrial index 12 months ago, you would have seen a return, of an astounding 481%.

As you can see, zimbabwe is crushing its competition, and maybe this might be signalling that something disturbing is happenings with every stock market around the world

Well, you see...just over a decade ago, zimbabwe was going through one of the worst episodes of hyperinflation in history. This was when they had a peak inflation of 89.7 sextillion percent per year. And that was just a smidge high to say the very least.

So, the country adopted new currency standards by 2009, and then soon after, zimbabwe actually had a fairly fast growing economy. For the next 4 years, it averaged 15% GDP growth per year, which was then followed by a much slower but steady growth rate of about 3% per year up until 2018.

But then in 2019, Zimbabwe entered a recession after a drought and ensuing famine hit the country, followed by the government attempting to reform its currency once again. And so the country was in an economic panic. So, it decided to use a tactic that it thought would help keep asset prices afloat, and prevent a complete economic collapse. It decided to print more money. In fact, by january of 2020, 70% of zimbabwe’s dollars had been created within the previous 12 months.

This injection of currency did help keep zimbabwe’s markets afloat, but what it really did was devalue the currency itself.

And just a few months later, the pandemic hit. This forced zimbabwe to create even more currency to prevent the collapse of its economy, and as of today, more than 93% of all dollars in zimbabwe, were created within the last 24 months.

And so, what this really did was devalue the currency in zimbabwe, which artificially sent prices of everything to insanely high levels.

So, in fact, the reason why zimbabwe’s stock market has sky rocketed in the last year has not bene because the companies or the economy has been doing well, but its because the government chose to artificially devalue its own currency, in order to prevent a market collapse. So in a sense, the gains seen Zimbabwe’s stock market are really just from increasing the money supply.

But I wonder where they got this idea from.

Its October 19th, 1987, Wall Street is seeing the stock market crash at a level not seen since the first days of the great depression. The market drops 20% in a single day, and the population becomes worried that this could be the start of a new great depression.

But Alan Greenspan, the head of the federal reserve, had an idea. Instead of letting the banks and investors fail, he decided to indirectly bail out some of these banks, by injecting liquidity and currency into the markets.

The was called the greenspan put.

Essentially for the first time, what he did was bail out the banks and provide investor confidence, by increasing the money supply in the markets. Sound familiar?

Now, in 1987, this ended up stopped the panic on wall street, and even though it would take 2 years before the stock market recovered from this single day of trading, an economic collapse did not happen and the banks did not fail.

But, unknowingly, what this also did was signal to the banks and population, that any sort of downturn in an economy or market was bad, and that we should only see perpetual growth forever.

So over the next decade, banks started taking more risks, investors started using margin a lot more, and many average every day people began investing into the stock market.



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