Don’t look for much comfort here:
It is true that the folks who work for major investment banks didn’t see it coming. Historians will eventually determine whether this is because the major investment banks uniformly employ boneheads, or, more likely, because, when you work for an investment bank, it is easier to conclude that now is always a good time to buy stocks.
In any event… the New York Times reports that economists who work for major investment banks now think that prosperity is just around the corner.
I don’t often make predictions, but here’s one for you.
If Congress doesn’t close the money floodgates, and in pretty short order, then we will begin to feel better soon. Because as I’ve explained before, the initial kick-in of an inflationary period feels pretty darn good.
But what happens when everybody figures out that the economy isn’t really growing, and that we’re just undergoing a major inflation? Why, Washington and its MSM lapdogs will claim we didn’t spend enough money, and free markets will take the blame once again.
I could be wrong. I hope I am. But if we keep spending on a trillion here, a trillion there basis, then this is exactly what will happen.