- The money supply is at all-time highs and grown around 40% in the last 5 years.
- The velocity of money in the 80’s is similar to what we’re seeing right now and could be an indicator that inflation may be headed back up this year.
- Housing and jobs need to improve before we will see real sustained economic growth.
We’re three months into 2015 and the markets haven’t given investors a lot to be confident about. The S&P 500 is slightly positive year-to-date – up 1.33% – and disappointing economic data seems to point to an inevitable pullback.
Certainly stocks are trading at relatively high valuations. The P/E for the S&P right now is 19.69 compared to its historical mean of 15.53 although it’s nowhere near its all-time high of 123.73 back in May of 2009…
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