This is an excerpt from the February 2017 issue of Richard C. Young’s Intelligence Report, where Dick Young helps investors compound wealth with income generating strategies that seek to avoid risk. Dick uses his proven inference reading based investment strategy to recommend stocks, bonds, mutual funds, and exchange traded funds generating attractive shareholder returns. Richard C. Young’s Intelligence Report is designed for the discerning investor not the fad driven speculator.
A Bull Market Made of Monetary Excess
I’ve chronicled here and on my websites (www.youngresearch.com and www.richardcyoung.com) the bubble conditions misguided monetary activism has created in financial markets over recent years. By keeping interest rates at zero and leveraging their balance sheets to once-unthinkable levels, central banks have helped create the third major asset mispricing this century.
The Fed stopped printing money in 2014 and has begun raising interest rates, but just as Yellen let off the monetary accelerator, her Keynesian counterparts in Japan and the euro area kicked on the nitrous oxide. And in a world of freely flowing capital, the Fed doesn’t have a monopoly on market distortion. The Bank of Japan and the European Central Bank can be equally distortive. The unprecedented intervention in markets has gone on for so long that it now feels normal to many, but I assure you there is nothing normal about the Bank of Japan printing money to buy equities or the European Central Bank doing the same to buy corporate bonds.