Not long before he died two weeks ago, the great central banker Paul Volcker wrote in the Financial Times , “Nihilistic forces … seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself.” Truth took a leave of absence in 2019 as it became acceptable to dissemble – no longer is there accountability for liars. This has changed the markets, too, with an influx of inauthentic “news”. Several times this year, the markets (and I) have been swayed by US President Donald Trump’s tweets delivering good news or bad, only to have hopes dashed as they have proved, at best, premature. We can’t just blame Trump. The fake news factories are gearing up globally, emulating Russia’s apparently highly creative and successful use of misinformation to drive emotions in both the US Presidential elections and Britain’s Brexit referendum . In China, respected institutions, such as Fudan University , have been told that academic freedom comes well after party loyalty. National Basketball Association team Houston Rockets’ manager Daryl Money , Arsenal footballer Mesut Ozil , All Blacks rugby star Sonny Bill Williams , and for a while Cathay Pacific , Dior and Versace have faced a backlash for perceived slights against China. In Hong Kong, the bank economist willing to make a negative call on the Chinese economy is an endangered species. Journalists don’t trust the police not to have planted weapons on protesters. Lawyers don’t trust the Department of Justice when it says that trials will not be political. Many Hongkongers don’t trust the government’s leadership in any matter. From the United States and Britain, to North Korea and Vietnam, believable facsimiles of the truth flood the wires. Studies show that fake news does affect stock market prices in the short term (days) – although the invisible hand in a free market is quite good at figuring out the truth in the longer term (weeks). Nevertheless, this could mean quick money for news manipulators, with regulators finding it increasingly difficult to police stories often appearing to emanate from officialdom. The extraordinary stock market rally this year to date has seen the S&P 500 index soar 29 per cent, the second highest in 21 years. Fifty-one years ago, the S&P 500 index broke 100. It took 30 years to hit 1,000, 16 years to reach 2,000 and just five more to break 3,000. Even the bond markets hit the jackpot in 2019 as US 10-year yields fell from 2.66 to 1.47 per cent. The bubble is not limited to the US. The MSCI World Index is up 24.2 per cent with France up 27 per cent. The FTSE China A50 is up 36.6 per cent and the Shanghai Composite Index is up 23 per cent. Languishing at the bottom are Britains’s FTSE at 12.7 per cent and Hong Kong at 7.8 per cent – extraordinary positive returns for two governments that comprehensively shot themselves in the foot last year. This asset inflation is driven by debt on the back of an all-time loosening of monetary policy by the major central banks. Governments which need to fix their budgets see zero interest rates as an excuse to borrow even more. Global debt levels have topped US$188 trillion , which our children are contracted to pay back. Move over trade wars, a global debt crisis is approaching Emerging markets now boast debt levels at 170 per cent of gross domestic product, and China’s debt is officially 255 per cent. These levels represent an incredible generation of fake wealth as inflated securities values create even more money when used as collateral for borrowing. If it sounds like a bubble, rises like a bubble and its valuations are in bubble territory, then it must be a bubble – and will burst. It is true that, over the past 20 years, a bumper year does not mean an immediate crash. However, this bull market is not a “dead cat bounce” recovery after a recession but a massive late-cycle boom within a bull market. Central banks’ enthusiasm at creating liquidity cushioned the impact of the US-China trade war, with observers raising the spectre of a global recession for the first time, Chinese authorities having to stimulate their economy, and most companies maintaining rather than improving their already fortunate positions. There was so much inauthentic news circulating in 2019 that we must hope to become better at filtering it in 2020. It is going to be harder to appreciate the reality that asset prices themselves are increasingly fake, borrowed from the future and temporarily supported by central banks and governments. The authorities believe that they have the power to prevent the next recession – but in doing so they are making matters worse and using up their resources to get us out of the next one. Investors will be able to keep dancing well into the new year and, with enough inauthentic encouragement from the authorities, quite possibly into 2021 but they had better be prepared to have a good look for their helmets, gas masks and goggles to face the future. Richard Harris is chief executive of Port Shelter Investment and is a veteran investment manager, banker, writer and broadcaster, and financial expert witness