High optimism on recovery and warnings of potential bubbles are leaving investors wondering who to trust.


Market analysis is not a science with clear answers—although many appear to believe it is.


Even as markets are sensing that the COVID-19 pandemic will be defeated and interest rates will stay low, clarity and certainty are notable by their absence.


Take Tesla and SpaceX boss Elon Musk, who in recent years has not only led the electric car revolution and taken the private sector into space, but also beat out Amazon CEO Jeff Bezos as the world’s richest person.


The multibillionaire’s market views are mostly limited to cryptic tweets and the actions of his companies—this week, Tesla purchased $1.5 billion US in bitcoin—but there are other voices who mirror his optimism.


James Mackintosh at the Wall Street Journal makes a rational case for why an expectation of more stimulus and little to fear in terms of inflation have left market investors looking for further gains.


“Investors are predicting the sort of inflation they like, slightly higher in the next few years but moderating back down after that, and it’s helping stocks and commodities while limiting the pain to bondholders from rising yields,” he wrote in Tuesday’s paper.


In the U.S., the Federal Reserve has said repeatedly that interest rates will stay near zero at least until the end of 2023. North of the border, as the Governor of the Bank of Canada, insisted in his most recent news conference, even an extremely strong recovery will take years to use up the country’s available surplus of workers and industrial capacity. That means the economy can continue to grow without causing inflation or an interest rate hike.


The debate surrounds where markets are heading in the longer term. Can they keep rising like a SpaceX rocket ship? Can they settle gently to Earth? Or will they crash land?


In examining the Canadian housing market, for example, Canadian real estate economist John Pasalis expects home prices will continue to rise this year. And while governments and central banks know what they are doing—stimulating the real estate economy and making Canadian homeowners feel rich—some realism will be needed eventually.


“I do agree that kicking the can down the road is actually a terrible plan and that the higher prices continue to rise, the harder the fall,” Pasalis tweeted.


Following Elon Musk’s investment in bitcoin, a similar view has been widely expressed elsewhere as well.


For practical investors, Musk’s move into bitcoin is seen as a move away from value based on earnings. Many conventional financial analysts see bitcoin, with its wild ups and downs and no clear intrinsic value, as not just optimistic speculation but gambling.


The question investors may want to ask first is how high markets can go. At what point does Musk’s rational exuberance, founded on low interest rates and large government spending, become irrational?