Except that periods of high inflation do NOT correlate with good stock market performance -- not only not in real terms but, to my knowledge, not even in nominal terms.
The 1970s come to mind. The inflation rate went up and the market went down to flat. In nominal terms it went down and in real terms it was absolutely decimated.
The last ten years in the stock market have NOT been good. Not impressive in nominal terms -- basically flat unless you want to pick the NASDAQ bubble bottom and even then not too impressive, imo. And in real terms? If you've been in stocks which haven't paid good dividends you probably haven't done well (commodity stocks and some surprises like Apple are the exception... but I don't think that is what the author is promoting).
Higher inflation rates are MISERABLE for business and most business profits. Even businesses which think they are benefiting or otherwise are able to increase prices (questionable with the consumer wiped out) find that they have mispriced their production. They discover, to their horror, that they can't replace equipment and other inputs for anything near the prices they have been assuming. Periods of high inflation correlate to high business bankruptcy rates.
I'm mostly PUZZLED why anyone thinks a period of even more liquidity would produce a Dow 20K? I mostly think they aren't thinking.
Anyway, I don't think the author has even begun to explain his "logic". He thinks that money is going to flow into the economy or the markets...why exactly?? The demographics don't support it. The national mood and infighting doesn't support it. The dollar doesn't support it. The interest rates CERTAINLY do not support it in that they can't go much lower but they could go, basically, infinitely higher and even a return to the old "normal" rate of 7-10 percent for long term debt would absolutely castrate business and the markets. Let's not forget there is DEBT behind that QE money and most of it is SHORT term interest rates which can, and likely will, go up at some point, possibly straight up. I think he's just a shallow Keynesian ... the worst of all.
I think the primary "skill" required to be a Wall Street mouth is to NEVER see a down side to Wall Street.
I have come to realize that men are not born to be free. Liberty is a need felt by a small class of people whom nature has endowed with nobler minds than the mass of men. -Napoleon
| 
