News that financial markets are almost back to where they were before the Covid Crash, while thousands of jobs are being shed is baffling to say the least. Larry Elliott of the Guardian* has always been his own man, and today’s column is its usual mix of careful analysis and searching questions. Read it, but as you do, think about these questions. And they don’t just apply to Britain.
1 There was a truly massive injection to save the system in the spring; and ultimately Central Bank money is our money. So why are stock markets recovering, but the real world shrinking?
2 Traditionally, a market recovery is held to predict the arrival of a real world recovery. But how long will the wait be? What causes the lag?
3 After the last rescue in 2009, why was there such a surge in property, bonds and assets, but the real economy remain so weak?
4 Does the constant bailing out of financial markets lead to reckless behaviour?
5 If it’s OK for Governments and Central Banks to subsidise financial markets, why can’t they subsidise a Green Economy?
6 Why was there no major asset bubble for 50 years after the Wall Street Crash?
7 Why has a dangerous asset bubble happened every six years since 1990?
We at LSS can only speculate, gentle reader. Meanwhile, Elliott recommends a little book called Boom and Bust by William Quinn and John D Turner , which may help.
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