Friday, 19 January 2018

It Is For You To Tell Me How This Can End Well, Not For Me To Tell You Why It Will Not

Broad-based financial bubbles are created by an expanding rate of monetary inflation whether expected or not. The more aggressive the expansion and the longer it lasts, the bigger the bubble, especially when CPI inflation remains "subdued" and "well-anchored".

As of December 2017
Add a near decade-long ZIRP on top and you've got an excellent recipe for an equity bubble of epic proportions - like we currently have in the U.S. and in many other stock markets around the world. For more on this, see 11 Charts Exposing The Madness Of The Stock Market Crowd and The 'CAPE To Saving Rate' Ratio Signals A Terrible 2018 For U.S. Stocks.

Related: The Austrian Theory Of The Business Cycle - A Short Synthesis

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