What Brexit?
With central banks promising unlimited liquidity, what can possibly go wrong?
Britain’s exit from Europe? No problem. Chinese yuan depreciation? Not an issue. Likely slowdown in Europe? Not really a worry. A strong dollar? Doesn’t really matter. Equities valued richly? Who’s bothered? Gold rallying with risk assets? Happens sometimes. Record low bond yields? Good for borrowers. With central banks promising unlimited liquidity, what can possibly go wrong?
These are some of the messages that are being sent by emerging market stocks these days, as the chart of year-to-date returns (in dollar terms) clearly shows. How long can the party last? As long as the central bankers keep the taps gushing.
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