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URL:  http://boards.fool.com/party-on-30522905.aspx

Subject:  Party on Date:  2/3/2013  7:50 PM
Author:  MDCigan Number:  41209 of 41316

The spiked punchbowl will stay for awhile:

http://contraryinvestor.com/mo.htm

So where does this leave us? It still leaves us with global central bankers committed to unlimited and indefinite money printing, but also a persistent ongoing disconnect between the printing of money and actually getting that money into the real economies globally, as has been the case since 2009. The money they “create” still needs to find a home. And now that we’ve moved into unlimited money printing mode, that means one big home. As a rule, central bankers can create additional liquidity, but they cannot control where or how that money will be put to use. Ideally, they would like to see banks increase lending with this unprecedented liquidity and theoretically get that money into the real economy, but bank lending has been very slow.

Almost as default, that leaves the global financial and commodity markets as a potential repository for historic global central banker largesse. Over the past four years we have heard more than a number of commentators tell us that “the stock market is doing well so the economy must be doing well”. Unfortunately this has not proven to be the case as we continue with one of the most anemic economic recoveries on record. Although we are certainly not there yet, the danger is that this current round of extraordinary excess central banker liquidity creates further asset bubbles, very much as happened with the late 1990’s tech stock bubble and the clear bubble in mortgage lending in the middle of the last decade. By the Fed’s own admission, they missed “seeing” the last two asset bubbles they had a hand in creating. Now that we have moved into the endgame of global central bank monetary expansion, let’s hope central bankers everywhere have had their annual optometrist check-up.

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