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Economy What Will Stop the Record Stock Market?
2018.12.07 13:39
https://www.marketwatch.com/story/this-is-what-will-stop-the-record-stock-market-2018-08-28
(Market Watch: This is what will stop the record stock market), Martin Feldstein, culumnist.
Markets are extremely volatile since October. DJ is down more than 1000 points this week alone.
Experts point the fingers on trade war with China, raising interest rate and slow down of global
economy. The author of the article emphasizes on rasing interest rate to control inflation.
Federal reserve board announced “the current interest rate is very close to neutral” last week.
Then trade war and the global economy may be the underlying cause. Trump intitiated trade war
may be contributing to slow global economy.
https://www.stlouisfed.org/publications/central-banker/summer-2004/budget-deficits-and-interest-rates-what-is-the-link
(Federal Reserve Bank of St Louis: Budget Deficit and Interest Rate; What is the Link?)
Budget deficit can cause inflation. To control the inflation, monetary policy is to raise interest rate. High interest
rate cools down stock market. Both military spending and welfare money are the major portion of government
budget. Military spending goes up when egocentric politician is in power and welfare cost goes up when populist
is elected. We have to watch out!
https://m.youtube.com/watch?v=6pw2U6B7m_k
(juggling)
I think the economy in modern days is like juggling. No matter how skillful the juggler is,
he will drop the ball sooner or later.