The Shiller PE Ratio is once again spiking

The Shiller PE Ratio is at a level seen only twice before: the dot-com boom and, uh, fall 2021. And we're on the brink of surpassing the 2021 level. The chart is something to behold.

What conclusions should we draw from this? What could undercut this trend in the foreseeable future?

On the one hand, the money supply (M2) remains frothy, and that money has to go somewhere, so maybe this PE thing doesn't carry the same significance. Also, it's easier than ever to invest, which again pushes cash into the market. And maybe the earnings numbers don't capture the intangible value of holding U.S. equities at a time when the U.S. remains a magnet for global investment and a symbol of stability (for now).

But then again, none of those factors has to be permanent, and if a time comes when they don't apply any longer, we're back to fundamentals: Valuation determined by profit over the long haul. A wave of layoffs or continued inflation or some other economic disruption could cause people to cut back their investments, or maybe overseas investments will become more attractive, and gravity takes effect.

Is this ratio still relevant?