Flooding the market with cash has not yet led to inflation, because the recession created a Grand Canyon of underutilized capacity to be filled first. When it is, though, expect inflation, and lower prices for long-term bonds. For a parallel situation, consider The Great War Loan Conversion, described in my Famous Financial Fiascos, where bond investors lost 99% of their money.
Read more...Entries about 'markets'
What About the Stock Market?
Pre-election years are usually good for the stock market. The defending president pumps oxygen into the system to produce a rosy glow as the voters go to the polls. That’s politics though, not economics.
Read more...
Twelve Choruses of a Market Cycle
Major market cycles have a life of their own, like the ups and downs of a manic depressive patient. The choruses sung at each stage are not based on objective data. They are just rationalizations.
Read more...