A photo taken with a zoom effect shows CAC 40 between the stock tackers displayed in … more
France’s most well -known stake, the CAC 40, increased by 18 % over the last twenty -five years. S&P 500 is increasing by 24 % In the last two months. These numbers Rate the comment.
For one, they bring to life the stupidity of the so -called “commercial deficit” in the US, there is no such thing, nor is there this as inadequate US savings consisting of foreign savers.
More realistically, the United States is the most economically dynamic country in the world, inhabited by the world’s largest companies. See S&P returns for the last two months, two years, ten years, etc.
CAC 40’s flat returns explain a wide desire among people around the world to export their savings to the US so that they can import shares to many large US companies. In other words, the so -called “commercial deficits” that keep politicians and experts at night and shrinking the hospitable calculation of GDP are a strong trademark of economic power. For the US
A flat CAC 40 over twenty -five years also puts waste in a simple perception that the low rates of Federal Reserve was the unmistakable source of stock market power throughout 21F century. The view, a popular one in the various US economic religions, has always been false.
This is due to the fact that markets gain reasonably power from periods of weakness. It is when the shares are down or fall in favor that the poor and the average go out to the proverbial pasture so that they can be replaced by good and big.
To understand the meaning of the above, stop and consider the companies that dominated the S&P 500 in 2000. Try the same exercise from 2010, 2015 and to some extent 2020. There is your stock market rally. The Fed was not so much the point.
Not convinced? It is the misleading idea that the “easy” money of the central bank increases the prices of the shares. If so, spend a little more time to think about CAC 40 and while thinking, check the ECB rates in the 21st century, including naive knives in the impossible that is “quantitative relaxation”.
As readers will see, the ECB was not so different from the Fed. That it does not raise the obvious question about why European indicators did not rally the way the S&P 500 made. If it is true, as the various economic religions tell us that stock indicators do not go up as long as the central banks provide “sugar” then “easy”? The answer to the previous question is that while enjoying the enormous forces attributed to them by the Austrians, the monetaries, the Keynes and the commission, the happiest truth is that central banks do not have the ability to change reality. In other words, the CAC 40 has not gathered precisely because France is not dense with large companies in the way the US is.
The simple, happy truth is that large companies authorized indicators, not central banks. That is why the CAC 40 is flat, because the S&P 500 is not and because abundant amounts of foreign savings continue to make their way to the United States.
