MarkHarvey on Nostr: What if everything since 2008 that we call our wealth, is just wealth effects created ...
What if everything since 2008 that we call our wealth, is just wealth effects created from nonstop Quantitative Easing (QE), combined with 0% interest rates?
During the run up to the Great Financial Crisis(GFC) in 2008-09, the S&P only reached the same level (around 1500) that it had achieved 8 years prior in the dot com bubble; then the market crashed during the crisis.
Markets were only saved by 0% interest rates and the introduction of a new Fed tool, Quantitative Easing, which was originally intended to be a temporary measure to stabilize the economy during the GFC. However, the Fed never stopped doing QE.
Markets have ripped since then, the US has taken on even more debt.
Ray Dalio followers:
Dalio claims that the end of the last long term debt cycle was in 2008 during the GFC, but the economy has not deleveraged, only become more leveraged since then with the introduction of QE.
I don't see how we can call an end to the long term debt cycle until the stock market can achieve new all time highs *without* any new rounds of QE, interest rates that are >0%, all while the economy becomes less leveraged as measured by Debt/GDP ratio.
Please comment if you have a different perspective, or believe I'm wrong in my thinking.
During the run up to the Great Financial Crisis(GFC) in 2008-09, the S&P only reached the same level (around 1500) that it had achieved 8 years prior in the dot com bubble; then the market crashed during the crisis.
Markets were only saved by 0% interest rates and the introduction of a new Fed tool, Quantitative Easing, which was originally intended to be a temporary measure to stabilize the economy during the GFC. However, the Fed never stopped doing QE.
Markets have ripped since then, the US has taken on even more debt.
Ray Dalio followers:
Dalio claims that the end of the last long term debt cycle was in 2008 during the GFC, but the economy has not deleveraged, only become more leveraged since then with the introduction of QE.
I don't see how we can call an end to the long term debt cycle until the stock market can achieve new all time highs *without* any new rounds of QE, interest rates that are >0%, all while the economy becomes less leveraged as measured by Debt/GDP ratio.
Please comment if you have a different perspective, or believe I'm wrong in my thinking.