Jeremy Grantham, in an interview for Bloomberg, warns of a “super bubble” in financial markets and warned that it could cause the S&P 500 to fall 43%.

The veteran investor and co-founder of GMO also said that heavy speculation on meme stocks, cryptocurrencies and other high-risk assets has peaked.

Moreover, he blamed the Federal Reserve for inflating asset prices and exacerbating wealth inequality, and emphasized the critical importance of sustainable investing.

Jeremy Grantham’s views are exactly the opposite of those of the biggest players on Wall Street, who predict further growth in the S&P 500 Index in 2022. We’ve previously published economic forecasts for 2022 and S&P 500 forecasts for 2022 from the world’s biggest banks.

Here are Grantham’s top 9 quotes from the interview, lightly edited for clarity:

1. “This is exactly how the great bubbles burst. It’s almost a classic. It’s a very rare pattern, and we’ve been crossing it off the list all year.” (He was commenting on the rise in blue chip stocks and the fall in more speculative stocks in recent days).

2. “Most superbubbles go below trend and stay there for quite a while. This time the trend is at a high of 2,500 points. It will be difficult to prevent the market from dropping to that level.” (Grantham predicted that the S&P 500 could fall 43% from recent highs).

3. “We have a global housing problem that could cause tremendous pain. We have a stock market bubble like we had in 2000. We have overpriced commodities. Oil is at $88 dollars. And we have the lowest real interest rates in the history of mankind.” (He explained why the bursting of a “super bubble” could hit the economy).

4. “Rates are less inflated everywhere than in the U.S., which is the peak of this bubble, as it was in 2000. What it meant then, it will mean today. It is that the U.S. will fall much more than the rest of the world.”

5. “The peak of insane behavior is behind us. We are now in the “buy on the dip” mode that superbubbles specialize in. We can’t let two years of buying frenzy fade overnight.”

6. We have a relatively modest measure of success, and that is that if you got out when I said “get out,” you’ll be glad you did. That doesn’t mean you won’t suffer at this time, but at some future point you will be glad.”

7. “The Fed absolutely does not suffer when there is a bubble burst. You can see that in the history of the last 50 years.” (Grantham argues that previous Federal Reserve chairmen contributed to the dot-com and housing bubbles).

8. “They act like low rates are a panacea and have no downside. This is blatant nonsense. It has created the greatest evil in our society – inequality.” (Grantham noted that low interest rates drive up asset prices, which disproportionately benefit wealthier Americans).

9. “Green investing is a necessity. It’s part of the global problem of living beyond our means. We are wasting our resources, we are poisoning the natural environment. Nature is starting to fail, and if we don’t fix it, we’re going to start failing too.”