QE ----> all risk assets πΈπ
Risk assets = stocks, junk bonds, gold/silver and crypto
Risk assets = stocks, junk bonds, gold/silver and crypto
When the music is playing, no harm in dancing but important to know the driver behind the asset levitation.
It isn't a new paradigm, its central bank QE.
It isn't a new paradigm, its central bank QE.
History has shown us that when liquidity is abundant (music is playing) asset bubbles generally stay inflated and they become bigger than most rational expectations.
However, when the central banks remove the punchbowl (tighten monetary conditions), bubbles ALWAYS break.
However, when the central banks remove the punchbowl (tighten monetary conditions), bubbles ALWAYS break.
Finally, many claim that there is no way to know when the bubble will burst. This is incorrect.
In the past, all bubbles burst after very tight monetary conditions (inverted yield curve) and since '09 pullbacks in risk assets (except COVID crash) occurred after the end of QE.
In the past, all bubbles burst after very tight monetary conditions (inverted yield curve) and since '09 pullbacks in risk assets (except COVID crash) occurred after the end of QE.
β’ β’ β’
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