How the growing disconnect between robust stock markets and the real global economy affects you

Key Takeaways

  • The major central banks are injecting trillions of dollars into their respective financial systems through asset purchases and stimulus packages to ensure market optimism
  • Abundant liquidity across the globe has led investors to look for investments promising higher returns, and with low interest rates on savings accounts, most of the money is making its way into capital markets
  • The Fed’s monetary policies have increased speculative activity in the stock market; this could cause asset bubbles, making investors invest heavily without differentiating between a good borrower and a bad one
  • Flooding economies with cash would enhance growth forecasts but pose the risk of rising inflation

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store