The govts after govts have been announcing stimulous and relief packages during last 12 months. The govts can not tax people at this unfortunate turn in history of mankind at higher rates and have to spend more and more. The easy option is to print money giving it name of stimulous and relief packages. This is resulting in transfer of wealth from savers to investors in a way that is outright cheating. This is ultimately not going to help investors also. When there will be diluted money floating around and ordinary folks will not have enough to buy goods and services at high inflated prices, the enterprises will find the going tough. The equation is very unpredictable. In such unpredictable times stock markets ruling high without companies having improved capacities or other strengths is fraught with risk to financial system itself. Is Corona going to make the crisis unmanageable in the end? Lets all keep fingures crossed and pray.
This is not to spread panic but is just some loud thinking.
Here I may mention that US might be deliberately diluting dollar value to let the buyers of its treasury bills suffer in a proportionate manner. This is nothing less then hitting below the belt and China, one of the large buyers of US gilt edged securities, may not be very amused.
Weaker dollar will even otherwise harm China’s export to US. This may result in some slow down.
The solution of this embroiglio is very simple, be ready for some economic slow down, don’t artificially jump start economies and maintain finanvial prudence, eventually the cylcle will turn too, vicious circle will be virtuous circle back again. Save environ should be the core concern and the practices may now be made conforming to it.