“Most people never run far enough on their first wind to find out they’ve got a second. -William James”
When the S&P 500 hits 2000 and an emerging market like India doesn’t even notice it, that is a wake-up moment for us. Global liquidity is still higher than it ought to be. The tapering down of QE to zero is another event that is waiting to happen. Somewhere, we are being wishful to think “Not so soon. Maybe after a while”. A simple lesson the world will learn very soon is that leaving excessive liquidity for longer than we should in our financial system will wake up the inflation beast. And, that is a beast that is very hard to tame once it rears its ugly head. It has been six years since America had serious financial lessons and looks like a back-to-school moment awaits America and by association the global markets. But, India seems to be in a soft spot. Bad news for the world could be good news for us. We are ahead of the curve in battling inflation. And, growth is back.
Review. Rethink. React.