Meanwhile QE2 has created an entirely artificial bubble in all dollar-based assets.
Look at the stock market. Since Aug. 27, when Bernanke unveiled his plan for QE2 in Jackson Hole, Wyo., the S&P 500 has risen by 26%.
So far, so good, right? But it’s an illusion. What’s really happened is a decline in the value of the dollars that the shares are measured in.
Measured in hard currencies, the stock market boom has been much less impressive. In Swiss francs, the S&P has risen by just 8.4% since Aug. 27. In currencies like the Swedish krone and Australian dollars it’s even less. Measured in gold, the S&P 500 is up just 4.5%.
Meanwhile the illusion of a boom is causing all sorts of investors to take crazy risks. Witness LinkedIn’s IPO. Economists from the so-called “Austrian” school say this is a reason to go back to a gold standard. It certainly makes you wonder what’s next.
发表于 2011-5-23 23:43
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