Governments are refocusing on fiscal policy instead of monetary policy. They have finally realised that a decade or more of central bank stimulus policies has created major asset bubbles in stock and housing markets in many major economies.
Unfortunately, these bubbles are now beginning to burst, with potentially serious consequences for the wider economy. We are track this development in relation to the markets themselves, and via our proprietary ‘Sentiment Index’ and ‘False Dawns’ charts. These have provided timely warning of the downturn now underway since December 2021. And they have since proved an excellent guide to its likely duration and intensity.