The Biggest Global Asset Bubble That Ever Was And Ever Will Be., page-176

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07/01/22

12:36

Post #: 58704422
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Originally posted by JimmyD75: ↑

'Hopefully, when confident that this fiscal and monetary stimulus is no longer required then the current expansionary policy is expected to change to either a neutral, or contractionary one.'You don't think the fiscal and monetary stimulus has been overdone in the last few years?

I'm with ididwork and dolcevitaon this one, in that the fiscal and monetary policymakers first bailed out the banks, and then facilitated the type of fiscal/monetary policy (which you call expansionary, but I call loose af) which has created the enormous asset bubble we have today. People have indeed been brainwashed in the last few years into believing that this is a conventional economic setting and so are taking on huge risks in not only investing in stocks and cryptocurrency, but real estate too. It is indeed a global asset bubble, an 'everything' bubble, recklessly built on leverage and the fear of missing out.

In 2021 investor exuberance reached fever-pitch. People are not only bidding up the prices of real assets, they are paying hundreds of thousands and even millions of dollars for virtual assets! But alas, with inflation now here and real, the moment of truth has come requiring intervention in the way of tighter fiscal and monetary policies. A free kick or two for the other side, if you like.

The question still remains though whether governments and central banks have the balls to effect the policies that might restore some semblance of rationality in global markets, because it is without doubt that the vast majority in this world have lost their minds.

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Certainly that there are speculative bubbles going around, which are the price to pay for current policies.

Some economists think that central bankers instead of fighting will be accommodating inflation because of the fear of a stock-market crash. By this they mean inflation running between 3% and 5%.
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