He makes an interesting argument, pointing out how the connection between loose monetary policy and stock markets has changed in the last decade or so.
Bad decisions on trade, taxes and monetary policy turned a 1929 stock market hiccup into the 1930s-long Great Depression.
There is not one single event which caused this shift, but rather a combination of higher stock prices, monetary stimulus, continued economic growth and seasonality.
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You are confusing two types of deflation: one is monetary deflation, in which the stock of money falls.
"The economy still faces powerful contractionary forces in the shape of widespread recession abroad, and at home falling house prices and stock markets, blunted monetary policy as banks constrain lending and rock-bottom business and consumer confidence, " says Andrew Smith, chief economist at KPMG.
One of the most fascinating aspects of the current debate about monetary policy is the belief that changes in the money stock are tightly related either to GDP growth or inflation at all.
It also began last year to post on a Monetary Authority-operated website queries it makes to companies on suspicious stock movements.
With the stock market hitting record highs, economic growth has stalled despite monetary stimulus from the Federal Reserve.
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Whether or not the bid is attractive in monetary terms, in the case of Manchester United many investors hold the stock for sentimental rather than financial reasons.
Meanwhile, as global central banks raise interest rates and tighten monetary policies to fight the rising inflation, slowing their economic growth, their stock markets have been in serious corrections.
"Both the US and Japanese stock markets are seen requesting a cut in interest rates to their monetary authorities, " said Hiroyuki Nakai, investment research manager at Tokai Tokyo Securities.
Financial stock watchers had taken a bearish stance heading into the Fed's monetary policy announcement, sucking up puts on the Financial Sector SPDR (amex: XLF) going into Thursday's rate meeting.
In Asia, China's Shanghai Composite slipped 0.3%, weighed down by Europe, while Japan's Nikkei Stock Average gained 0.6% after the Bank of Japan eased monetary policy by expanding its asset-purchase program.
If the SEC monetary penalty happens, it would be only the second time the regulator has fined a stock exchange.
The Japanese stock market hit a four-year high Thursday in the wake of the recent aggressive monetary easing by the Bank of Japan.
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Even if our balance sheet stays large for a while, we have two broad means of tightening monetary policy at the appropriate time: paying interest on reserve balances and taking various actions that reduce the stock of reserves.
Meanwhile, although the rules under consideration may make life much more complicated and costly for many U.S. investment banks, bank stock prices are heading happily upward, on news from Europe promising resolution of the knotty fiscal and monetary issues there.
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