HindeSight Dividend Letter - Groundhog day!

​Groundhog seems a very apt way of describing the current state of play in the financial markets, with reports of US stock markets being in the tightest trading range for five decades prior to last Friday. With the cycle of strong data, Federal Reserve officials talking about imminent interest rises, followed by a piece of weak data, all bets are off the table and back to the elevated plateau in most asset classes, as the monetary policy farce continues to mask reality. Whether it is in the US, Japan, the UK or Europe, news about additional monetary policy stimulus continues to make the headlines. Nobody ever seems to acknowledge that if one country alone employed this strategy, it would be obvious that it was on a road to disaster. On a stand-alone basis, if any country cuts interest rates to zero while they bought huge quantities of bonds, sovereign and corporate, inflation would skyrocket and the currency and economy would collapse.