Like what you've read?

On Line Opinion is the only Australian site where you get all sides of the story. We don't
charge, but we need your support. Here�s how you can help.

  • Advertise

    We have a monthly audience of 70,000 and advertising packages from $200 a month.

  • Volunteer

    We always need commissioning editors and sub-editors.

  • Contribute

    Got something to say? Submit an essay.

 The National Forum   Donate   Your Account   On Line Opinion   Forum   Blogs   Polling   About   
On Line Opinion logo ON LINE OPINION - Australia's e-journal of social and political debate


On Line Opinion is a not-for-profit publication and relies on the generosity of its sponsors, editors and contributors. If you would like to help, contact us.


RSS 2.0

The money torrent

By Kris Sayce - posted Tuesday, 9 November 2010

Why this money torrent…will last… or won't last.

If the grinning buffoons on CNBC are an indicator of bull market bubble madness, then the market is set to soar higher.

But by the same token, the grinning buffoons are just as much a sign to tread carefully with this market too.


Seriously, we haven't seen so many smiling faces on that business channel since… well, since the last unsustainable price bubble.

The torrent of new money that's about to flood into global markets will push some asset prices higher.

Just beware, don't be fooled into thinking that because the stock market is strong that it'll result in a strong economy.

Right now markets are high. And by that I mean they're high on drugs… money-printing drugs.

High on cheap money. When that happens mistakes are made, more risks are taken, and eventually a lot of money is lost.

An example of how dangerous - but profitable - this rally is was a caption we saw on CNBC this morning. We've searched their video archives to see if we can find the clip, but we've come up blank so far.


Anyway, the gist of the caption was along the lines of, "Why QE3 and QE4 are on the cards." That's not exactly what the caption said, but as I say it was the gist of it.

It's the mania of the quick drug-induced hit. The Fed announces it's going to print money and sure enough stock prices soar, and bond yields collapse… oh, and gold is up over 3%, besting the 2% rise of the US stock markets. And silver is up a whacking 7%!

Now that market participants and central bankers have seen how easy it is to create an asset bubble, guess what, they'll use their powers to try and keep that bubble expanding. Hence QE3 and QE4.

  1. Pages:
  2. Page 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. All

A fuller version of this article was published on Money Morning Australia on November 5, 2010.

Discuss in our Forums

See what other readers are saying about this article!

Click here to read & post comments.

Share this:
reddit this reddit thisbookmark with Del.icio.usdigg thisseed newsvineSeed NewsvineStumbleUpon StumbleUponsubmit to propellerkwoff it

About the Author

Kris Sayce is editor of Money Morning. He began his financial career in the City of London as a broker specializing in small cap stocks listed on London’s Alternative Investment Market (AIM). At one of Australia’s leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.

Other articles by this Author

All articles by Kris Sayce

Creative Commons LicenseThis work is licensed under a Creative Commons License.

Article Tools
Comment Comments
Print Printable version
Subscribe Subscribe
Email Email a friend

About Us Search Discuss Feedback Legals Privacy