Mr Grantham, who has a long history of identifying market bubbles, warned that the United States was “participating in the largest and most extreme global housing bubble in history”. Writing in an online article, he explained that home prices in the United States were now at the highest family income multiple ever, and were even ahead of the levels of the 2006 housing bubble which preceded the financial crisis. Mr Grantham also lashed out at stock markets, adding: “The US market today has, in my view, the strongest buy-in to the idea that stocks are just going up, which is surely the true essence of a bubble.” Along with houses and stocks, the investor also pointed out that bond markets and commodities such as oil and metals were overvalued.

As evidence of the impending end of the bubble, Mr Grantham points to the fact that major bubbles have already seen a “burst”, with equity prices accelerating massively ahead of previous rates before correcting.

As recent examples of this he gives the “meme stock madness” of GameStop and the AMC movie chain and the rapid rise of dogecoin following comments from Elon Musk.

He also casts Hertz as an example of a “stock star meme” after the company saw its stock price soar on news of buying a fleet of Teslas.

In a dire warning about the future direction of the markets ahead, Mr Grantham concludes: ‘We are in what I consider to be the vampire phase of the bull market, where you throw everything you have at it: you stab it with Covid , you shoot it with the end of QE and the promise of higher rates, and poison it with unexpected inflation.

“Until, just when you start to think the thing is completely immortal, it ends up flipping over and dying.”

According to him, the market has already started to deflate from its riskier ends since last February.

In particular, he again points to GameStop, AMC and Dogecoin as well as “over a third of all NASDAQ stocks” which have fallen 50% from their highs.

Further, he predicted that when “pessimism reigns again” prices for broader assets would fall further.

Putting this into context, he predicts that a return of asset classes two-thirds of the way back to historic norms would equate to a loss of wealth of £25.82tr ($35tr) in the US alone. .

Such a decline, he said, would be compounded by inflation and pose “serious economic problems”.

Mr. Grantham has a long history of identifying bubbles as they unfold.

He previously identified the Japanese asset price bubble of the late 1980s as well as the dotcom bubble of the 1990s and the housing bubble that led to the 2007 financial crisis.

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Advising investors, he suggested avoiding US equities, suggesting they should instead look to emerging markets and cheaper developed countries like Japan.

Meanwhile, in a damning verdict on cryptocurrencies, he compared token interest to the clothes of the Emperor.