Masters in Business Jeff Hirsch on Why Big Federal Spending Plus Inflation = “Superbooms”
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Feb 19, 2025 
Jeff Hirsch, Editor of the Stock Trader’s Almanac and author of 'Super Boom,' delves into the intriguing concept of 'superbooms' driven by federal spending and inflation. He highlights historical examples where wars and government expenditures sparked economic surges. Hirsch discusses how recent fiscal measures post-COVID, like the CARES Act, can mirror past superbooms, suggesting a similar bullish market trend today. He provides insights into long-term investment strategies that capitalize on this unique economic environment shaped by technological innovation and governmental policies.
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Super Booms Explained
- Yale Hirsch discovered a pattern of exorbitant government spending causing high inflation.
- This drives market prices to new heights, creating "super booms."
Dow 39,000 Prediction
- In 2010, Jeff Hirsch predicted the Dow would hit 39,000 by 2025 due to war and inflation.
- Barry Ritholtz initially dismissed the idea as crazy but was later convinced by the historical data.
COVID Spending Parallels Wartime
- The COVID-era CARES Act, with its massive fiscal stimulus, mirrored wartime spending's impact on GDP.
- This spending, coupled with subsequent inflation, created conditions similar to previous "super boom" cycles.
