The differences between 1929 and Today

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When the fed claims that there is a danger to growth going forward thus it will cut interest rates, the markets respond to such a statement by showing large gains. Thus we can see that the markets are not concerned with the danger to the fundamentals but are stimulated greatly by the prospect of increase in the money supply regardless of what is motivating that increase.


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It's not just that, stock market valuations should rise when interest rates fall. The present value of future earnings increase as a result. Also stocks become more attractive relative to bonds in reality.