Bank of England (Photo credit: Wikipedia)
This is an excellent article from the respected macro-economist, Gavyn Davies, writing in his FT blog. If you are financially literate, it is well worth a read. Check it out!
via What will happen to markets when QE ends? | Gavyn Davies.
My simple conclusion from reading the article is that we should not necessarily expect markets to crash when QE ends (quantitative easing); there will obviously be a period of adjustment as highlighted by Mervyn King, outgoing head of the Bank of England. However, in my view, by the time QE ends, economic fundamentals will be on a stronger footing. This is good news.
Hopefully, major corporations will start to invest some of their piles of cash soon? When big corporations start investing in major capital spending and acquisitions, it will filter through the economic food chain…