Pottering About
I have written before about my judgement that equity markets were overvalued at the end of 2019 never really getting tested because the advent of Covid-19 and the response of global governments (ie a huge stimulus of ‘free’ money) created a set of conditions that were way beyond the normal market cycle.
I have argued since that the flow of cheap money and one other factor that I have repeatedly mentioned, the arrival of novice retail traders with new technology at their disposal, has been propelling valuations along for equity shares and some new asset classes like crypto ‘currencies’ and their plethora of proxies.
I think we have seen enough since March 2020 to come to some new conclusions.
Half yearly pause for thought
As inflation rears its head and there is talk of rising interest rates – see next article for some analysis of the direct impact of this – and the Covid crisis is becoming normalised in Western economies, perhaps we should consider the Covid deflection almost fully worked through? Certainly, we must be close to the end of ‘spend, invest and be merry for tomorrow never comes’ era for governments.
You must be logged in to post a comment.