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Before you start reading this post note that I am not an equity market analyst and this is not investment advice. Rather it is an attempt to discuss the impact of monetary easing on the US stock market and to what extent the Fed's actions have created a stock market bubble.
Recently, the data for the UK economy has been very strong, and it is very clear that the UK economy is in recovery. So what is the reason? Well, you guessed it - monetary policy.
When I first read Milton Friedman's Free to Choose when I was in my teens two things particularly impressed me. First of course Friedman's monetarist ideas and second his strategies for moving from a Welfare State to a classical liberal society.
Today it is 80 years ago that US alcohol prohibition was ended. Interestingly enough two of my favorite monetary thinkers of the time - Irving Fisher and Clark Warburton - had strong views on prohibition.
Over the past five years Market Monetarists have gotten a reputation for always being dovish in terms of monetary policy. The Market Monetarists have day-in and day-out been pushing for monetary easing in the US, the UK and the euro zone. So our reputation is correct in the sense that we – the Market Monetarists – in general have favoured a more dovish monetary stance both in the US and in Europe than has been implemented by central banks.
I must admit that I am a bit of a "serial shopper" when it comes to buying books on Amazon. Today I (pre) ordered a book I have been waiting for some time - “Fragile by Design: Banking Crises, Scarce Credit,and Political Bargains” by Charles Calomiris and Stephen Haber. I have written about the book before: