Doc - I don't understand your logic. How does expanding the monetary base create higher expected returns? Expected returns is a function of the risk premium of each stock as well as how it correlates with the market. In what way do you think that the monetary supply affects these conditions?
I suspect the massive expansion in the monetary base has made stocks better future expect relative value (to dollars) than they would otherwise be.
ReplyDeleteDoc - I don't understand your logic. How does expanding the monetary base create higher expected returns? Expected returns is a function of the risk premium of each stock as well as how it correlates with the market. In what way do you think that the monetary supply affects these conditions?
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