Everything that is too much bursts, the problem is to be able to perceive when it is too much, because it can be with a little more, as much more may be needed. It was like this in the dot.com bubble and in the real estate bubble that preceded the 2007/2008 financial crisis, because the market was perfectly aware that unsubstantiated upward movements always have an end, only the uncertainty of their longevity allows you to inflate even more the balloon that will burst. This is the scenario of recent years on Wall Street, especially in the last few weeks when the stock market has substantially widened the gap with the behaviour of the economy.
The most curious thing is that this time the responsible is well identified, the FED, which throughout its successive quantitative easing programs created a huge injection of liquidity, totally created out of nothing and always with the theory that one day is for the withdraw, the problem is that not only does this day not come, but what appears is yet another reason to increase this market distortion, which in Monday’s session had another chapter with the central bank announcing the bond purchase program allowing Wall Street to reverse what would have been a negative day, but in the long run creating a sea of zombie companies. In the end, the only doubt, again, is to understand how long, but something will break, either the FED ceases to support the market or the market ceases to support the FED, namely removing the credibility of the US Dollar that can give the currency a strong correction movement, as has been said in recent weeks.
