I’ve given up trying to understand the market. I did very good in the 80s and 90s, where I cashed out just before the dot com crash and made a bundle, but I don’t understand the market post 9/11. How can the govt continue to churn out buckets of fake money (’quantitative easing’) for years and years and not suffer 1970s-style inflation or worse?
Maybe I’m just old fashioned, but it just doesn’t make any sense to me.
I share your view. It’s a mystery to me also.
The banking regs are such that the QE money can't be lent out. Banks everywhere are sitting on piles of cash that they can't move.
If the democrats don't win in November '16, watch for the regs to be revised and that money to be let loose in Q1 '17.
Then you'll have your inflation.
“but I don’t understand the market post 9/11. How can the govt continue to churn out buckets of fake money (’quantitative easing’) for years and years and not suffer 1970s-style inflation or worse?”
Because the pressure isn’t inflationary, it is Deflationary. Increases in productivity, tied with an aging Western population, are leading to declines in consumption, as well.
At least in US Markets, and now in Euro markets, there is no longer this vital economic tool called “Price Discovery”, where value is set by the markets. Pricing is now COMPLETELY dependent on either government intervention, government assurances, or cheap government cash.
Should the flow of cheap money and direct government purchases of private securities ever stop, pricing will return to “Real value”, most likely in the form of a MASSIVE crash.
I’m far from knowing anything about economics , but it appears to me that a big factor in QE without massive inflation (so far) is that the MEDIA keeps lying to us about the state of the economy, assuring the low-info morons that Hussein has wrought an economic miracle.
Now, if a Republican is elected in 2016 the media will then start to tell the truth so as to blame them for the inevitable crash which is to come.