What drives the stock market higher or lower? In one word, it’s liquidity. Below on the left is a bar graph of global liquidity in US$ trillion. And on the right is the Vanguard Total World Stock Index ETF (VT) over the same time. Notice the correlation between the two? Here’s what they look like overlapped together.… Read More »
Why Do Governments Target 2% Inflation? The Bank of Canada maintains an inflation rate target of 2%. The official websites of Central Banks in the U.S., in Europe, and in Japan all appear to target this magical number when deciding how to conduct their monetary policies. But why? Inflation isn’t necessarily a good thing. There are ways to grow the economy and generate… Read More »
The basic concept of debt is simple. It’s when someone borrows money from another person. But once we start looking at different forms of debt such as sovereign debt, treasury bonds, mortgage-backed securities, demand loans, etc, it can start to sound like a different language to many of us. 😕 Even the money in your wallet right now is… Read More »