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22/12/17
12:18
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Originally posted by AverageJoe
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"You only find out who is swimming naked when the tide goes out", Warren Buffett once famously quipped.
Some analysts believe the saying will be particularly relevant in 2018, That's the year in which huge flood of liquidity which the world's central banks have unleashed upon global financial markets - together they have bought more than $US11 trillion ($14.4 trillion) in bonds and other financial assets since the financial crisis - will reach the high-water mark.
Over the course of next year, the amount of fresh liquidity being injected by the world's major central banks will fall from around $US100 billion a month, to zero .
Now, analysts agree that the central banks' massive bond buying programs - known as quantitative easing (QE) - have held down long-term bond yields and squashed volatility in almost all key financial markets to historic lows.
But unfortunately no one knows what will happen when central banks reverse their aggressive monetary stimulus , because we're in completely unchartered waters."
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Have been contemplating this change of policy for sometime. The natural instinct is to go with the logic that no additional money stimulus and market will not rise but the QE experiment was not even generating inflation so why should the closure of money tap be detrimental to economic growth?
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Interesting AJ,
But I think there has been plenty of inflation.
Just that it looks different now a days