I remember a time when markets did not appear to be driven (manipulated) by the next Reserve Bank announcement and/or piece of economic data that in reality means NOTHING to the way we live or the markets we invest in.
I have become so cynical of what we read and what we are told. Following my posts on weekend I continued to be amazed by HOW many posts on Tw ere predicting another financial crisis that might be triggered by collapse of Deutsche Bank and/or Credit Suisse. By Monday Morning I smelt a rat. My take on some of the happenings of last decade or so:
GFC = Quantitative Easing was invented; pump previously inconceivable amounts of $US to prop up the markets.
MARKETS RALLY.Wont it cause inflation?
Apparently not when you have artificially low interest rates of essentially 0%.
US debt spiral out of control ..... wait it does not matter because of MMT.
MARKETS RALLY.Coronavirus = just throw even more printed money at the problem = about 10 times as much as was thrown at GFC.
Surely THAT would cause inflation?
MARKETS RALLY.Official answer = no it wont.
Inflation appears = No problem its Transitory. Phew!
MARKETS RALLY.Inflation persists = All Reserve Banks blame China issues, Russian war & "Supply Chain issues". Apparently NOTHING to do with the trillions of dollars that have been printed?????
WAR ON INFLATION = Interest rates rise MORE quickly than markets like = stock markets dive
UK decide to cut tax rates = bond market hissy fit = currency dive = HOW WILL IT BE PAID FOR ? (wait what about MMT; debt should not matter) = Bank of England step in with undertaking for UNLIMITED SUPPORT of market.
eg first sign of markets getting what they want eg. unlimited printing.
MARKETS RALLY.Down in little old Oz second sign of RB capitulations. Inflation requires an interest rate of 0.5% or maybe even 0.75% ..... no .... 0.25% =
MARKETS RALLY.Common theme bolded.
That is all.
(20min delay)