Looking Outside the U.S., an EXPLOSIVE Move is Underway
Over the last week I’ve outlined how the Fed has made it clear that it wants stocks to go into a bubble.
We know this because:
- Fed Chair Jerome Powell stated that the Fed won’t raise rates again until it sees a “really significant move up in inflation that’s persistent.”
- The Fed stated it doesn’t see any “financial imbalances” AKA bubbles.
So the Fed is broadcasting that it won’t be raising rates again for a LOOONG time… at the same time that it’s claiming stocks are decidedly NOT in a bubble – despite one of the biggest bull markets in history.
And bear in mind, the Fed said this as stocks were hitting new all-time highs.
And all of this is happening while the Fed is engaged in a $60 billion per month QE program as well as an overnight repo program of $125 billion and a term repo program of $45 billion.
No rate hikes, no signs of a bubble, and a TSUNAMI of liquidity… this is as close as you can get to the Fed broadcasting that it wants stocks to enter a bubble.
Of course, the U.S. stock market will benefit from this, but so will other markets as well.
The Fed’s Bubble is a Global Phenomenon
Take a look at Emerging Markets (EEM):
Germany’s DAX (DAX):
And Brazil’s Bovespa:
You get the general idea.
My point is this: With the Fed and most other central banks now easing monetary conditions, global stock markets are entering a melt up. Stocks are most responsive to liquidity. And central banks are providing a tsunami of it!
Editor, Money & Crisis