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Stock Magiq
We are informed by the financial press the agitated creation of reserves are, to capital market participants, a mix of whiskey and Felix Felicis; liquid courage and luck. The first manifestation of the wealth effect, which will encourage households to consume and corporations to invest. The financial market animal spirit. The economist's Patronus Charm.
But what did the Federal Reserve do - and more importantly not do - in 1929, 1987 and throughout 2008-20 to support US stock markets? When was there a direct link between bank-created money and the stock market? And when was there nothing more…
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