BRUNO BERTEZ
May 5, 2026

The stock market is a “claim on the profits of the system.” The continuous rise in share prices reflects a profound imbalance — one in which “too much money is chasing too few opportunities.”

The stock market’s upward march expresses the relative scarcity of profit in the face of an excess of monetary capital.

This is a classic, commonsense reading, yet it is often forgotten and therefore underestimated.It is forgotten — or rather deliberately obscured — because it is negative: it shows that the rise in the stock market is not a positive development, not a sign of equilibrium or harmony, but rather a symptom of dysfunction.

The system now requires perpetual ascent and ever-higher valuations simply to keep functioning.

The continuous rise in the stock market is a kind of cost the system must pay in order to continue operating.

In a way, this upward movement proves that we have lost the secret of spontaneous, self-sustaining growth. The “green shoots” dear to Bernanke in 2010 never took root; the punch bowl of monetary liquidity has had to be constantly refilled.

This is precisely what observers such as Warren Buffett mean when they repeat that “too much money is chasing too few opportunities,” and what heterodox and alternative economists (Minsky, Keen, or even modern Keynesians speaking of “secular stagnation”) have been saying for years.

Current data fully confirm my diagnosis.

Valuation multiples are extreme: the Shiller CAPE (cyclically adjusted P/E over ten years) is oscillating between 36.5 and 40.9 depending on the source (Multpl, GuruFocus, MacroMicro, YCharts). This places it in the top 2 % of all readings since 1871. Only the peaks of 1929 and 1999–2000 were higher.In other words, investors today are paying roughly 38–40 times the real average earnings of the past decade.

The earnings yield has therefore fallen to around 2.5 %, compared with a historical average of 5–6 %.

M2 (broad money supply) is in the stratosphere: it reached $22,686 billion in March 2026, with year-on-year growth recently climbing back to +5.5 %. A colossal stock of liquidity has been created since 2008, especially between 2008 and 2020. The total liquidity in the system far exceeds M2, as demonstrated by the work of Howell, which I regularly report on.

Real earnings are advancing, but the rise in share prices has far outpaced profit growth.It is therefore the expansion of multiples — that is, the overpayment for claims on future profits — that is driving the market, not merely the “strength” of earnings.

What is scarce becomes expensive.

Real profit (the profit derived from the production of useful goods and services) has become relatively rare compared with the vast Ugolin-like ogre of monetary capital desperately seeking a return.

Hence the chronic overvaluation that passes for a blessing, even as its negative effects continue to worsen: inequality, a Malthusian tendency that forces capital to buy itself back in order to maintain its price, instability, short-termism and financial gamesmanship, and a deterioration in the serious allocation of capital to genuine social needs.

Why this excess of capital-money — and therefore of debt?

This is the key question, and the answer is brutal and obvious: the modern fiat monetary system is intrinsically based on debt.Every creation of money — except for physical banknotes — occurs through bank credit or central-bank operations (QE). There is no new money without new debt! No new debt, no new money!

Since the 1980s (and especially since 2008), developed economies have lost the secret of “spontaneous, self-sustaining growth.” Ever-greater catalysts are required for production and exchange.

Why?

Here again, the evidence is overwhelming:

Productivity is in structural decline — due to demographics, the maturation of service economies, regulatory costs, and the exhaustion of easy gains from globalization.

Private and public debt has accumulated to very high levels, weighing on future demand through the “debt overhang” effect. These debts are an ever-heavier ball and chain.

Global competition and financialization: faced with eroding profitability, companies prefer to go on strike, buy back their own shares, or distribute dividends rather than invest massively in productive physical capital. The Fed’s research on the falling share of value added going to labor and the rising free cash flows is eloquent.

The result of these vicious circles is that, in order to sustain nominal GDP growth and avoid the deflation that would collapse the debt pyramid, the system must be permanently doped — whatever the rhetoric and despite the verbal homage paid to virtue.

As with addicts and alcoholics, abstinence, austerity, and orthodoxy are always promised for tomorrow.

Demand must be doped — through consumer credit, real estate, and services.

Supply must be doped — through leverage, equity financed by credit, investment, buybacks, and M&A.

This is the “lost secret” that, when presented in reverse, often leads me to write: “Long live crises — they make us richer.” Restated plainly, it means: the more the system becomes unbalanced, the less growth is self-sustaining, the harder it becomes to keep the machine running, the more money-debt is required — and the more this favors a rise in the stock market.

The rise in stock markets is not a sign of health and prosperity; it is a rise born of misery.

The stock-market boom is overdetermined by the endogenous crisis of capitalism!

Classical capitalism (19th–20th centuries) generated growth through real savings according to the scheme: productive investment → real profit → reinvestment. It also distributed the corresponding incomes, with periodic destruction of capital and unemployment to restore balance.

Today we live in a regime of growth by indebtedness — credit-driven growth. Without this permanent doping, we risk Japanese-style secular stagnation or worse.

Is this a symptom of capitalism’s weakness?Of course it is — the symptom of an endogenous disease and of the fundamental difficulty of always guaranteeing capital the profit it seeks.

Since it can no longer valorize itself “normally” through a self-sustaining economic cycle, it is forced to inject something exogenous, an artificial energy: credit.

Promises must be injected that become increasingly untenable, because ever more credit is required to achieve the same real output, and the production of credit itself must be accelerated to generate any surplus growth.

The disproportion between the real economy and the imaginary world of finance must constantly be widened.

The system must get high, levitate, bubble.

This is made possible by monetary doping, which creates a disproportion — an imbalance — between the mass of available profit and the mass of monetary capital seeking a return.

Put differently, the capitalist system tends toward entropy, and to counteract this entropization it must inject external energy: money, still more money, and ever more money. (See the “EN PRIME” section below.)It must run faster and faster in terms of credit — and therefore money — simply to stay in the same place…