The Fed Can’t Save us from a 70% Market Crash!
The Fed Can’t Save us from a 70% Market Crash!
Wealthion: 8-26-2025
Are we standing at the precipice of an economic reckoning?
According to veteran investor and organic chemist Dave Collum, the answer is a resounding yes. In a recent, in-depth conversation with Wealthion, Collum delivered a sobering assessment of the global markets, arguing that the entire economic system is engulfed in a “massive bubble” unlike anything we’ve witnessed before.
His insights paint a stark picture, suggesting that the “game is over” for conventional monetary policy and an inevitable, significant correction looms.
Collum doesn’t mince words: current market valuations are at historically unprecedented levels, soaring approximately 200% above the long-term average. This isn’t just a deviation; it’s a dramatic inflation that, according to Collum, signals an inevitable “regression to the mean.” What could this mean for your portfolio? He warns of a potential 65-70% correction in the S&P 500, a figure that should make any investor sit up and take notice.
A critical component of Collum’s argument is the ineffectiveness of traditional tools available to the Federal Reserve. He believes that the conventional monetary policies designed to manage economic cycles and control inflation are no longer viable. With interest rates already low and aggressive stimulus measures having been exhausted, the Fed is “white-knuckling” its approach, lacking the tailwinds it once enjoyed.
Collum, reflecting on his decades-long investing career, draws parallels to the late 1990s tech bubble. However, he emphasizes a crucial distinction: the current bubble is “far more pervasive.” This isn’t just about overvalued tech stocks; it affects almost every asset class and economic sector, extending even to the prices of basic goods like eggs.
Official inflation statistics, Collum contends, have significantly understated the true picture for years. He estimates real inflation could be double the reported figures, masking an ongoing recession in real terms.
This hidden inflation creates a precarious environment where inflation expectations are already baked into wages and contracts, severely limiting the Fed’s ability to maneuver without triggering widespread market chaos.
Finally, Collum critiques the overly optimistic return expectations held by many investors. He points out that over long time horizons, inflation-adjusted returns on equities have been historically low, and current valuations imply future returns will likely be negative or very subdued.
Dave Collum’s insights serve as a powerful wake-up call, urging investors to re-evaluate their strategies in what he describes as an unprecedented and dangerous economic landscape. His message is clear: the rules of the game have changed, and a cautious, contrarian approach focused on safety and real assets may be the wisest path forward.
For a deeper dive into Dave Collum’s insights and a full understanding of his compelling arguments, be sure to watch the full video from Wealthion.