If the credit-pumped Dow Jones hitting new highs is a sign of
economic recovery, then what does it mean when the credit-pumped Nikkei collapses by one-fifth in three weeks?
- JAPAN’S NIKKEI 225 FALLS 20% FROM MAY 22 HIGH
- JAPAN’S TOPIX INDEX FALLS AS MUCH AS 5.1%
- NIKKEI 225 FALLS 6%, EXTENDING LOSSES
I’m sure Paul Krugman already has his usual explanation ready to hand. Abe printed a lot of money, sure. But he simply didn’t print enough….
Meanwhile, my inflation/deflation debate opponent sends me the following admission by an international banker:
“If you look at it historically, there has never been a period when the Fed has started to take back stimulus that has left the markets untouched. And this time it is a bigger exercise. We have moved markets from 2009 to 2013 on stimulus and now we are trying to take a step into a world which is more driven by natural growth. That transition will not be easy.” – Hans Peterson, global head of investment strategy at Swedish bank SEB.
Everything between 2009 and 2013 was “stimulus”. They flat out admit it… and you know people STILL won’t listen to us.
C’est la vie. They were warned.