His argument is that there's no sink for divine orbs, therefore supply will go up, therefore price will go up? From an econ standpoint, that'd be the opposite of what you'd expect.
So IMO, there's two options: it's a bubble, or there's a sink he doesn't realise.
Maybe people are just using divines to perfect their items? If you want top 25% roll on all 6 affixes, you're looking at a 1 in 4,096 odds. Now obviously that's a bit extreme, but poe players have been known to dump huge amounts of currency into crafting god-tier items, so it also wouldn't be too surprising.