Many market prognosticators have labelled this Bull market as the “Central Bankers’ Bubble.” Certainly, after years of Quantitative Easing, it is fascinating to see the world’s Central Banks backpedaling into accommodative policies after only a few fleeting moments of tightening. But what does that really mean? Look at Japan, after years of buying Japanese ETFs, the Bank of Japan now owns 75% of all of them! Since 2010, this wildly accommodative policy has, per an enlightening paper “Asset Prices and Corporate Responses to Bank of Japan ETF Purchases” “boosted share prices but largely not transmitted into real investment growth.” Hello! So as Global PMIs slide into the longest losing streak in decades this is something that the Fed should keep an eye on.
The reality is, as interest rates hit fresh lows, government spending hits fresh highs and areas of real improvement & real business remain…
