The market reaction to the arrival of COVID vaccines tells us a lot about the effects of the "monetary flooding"

OECD countries are currently faced with “monetary flooding”, as the money supply is growing very rapidly thanks to the monetisation of fiscal deficits. It is expected that once uncertainty and risk aversion decline, money will be reinvested in other asset classes to rebalance the portfolio structure and this will lead to: A sharp rise in share prices; A sharp rise in commodity prices; Without any rise in long-term interest rates. The reaction of the markets (financial, energy) to the announcements on COVID vaccines clearly confirms that this "portfolio rebalancing" analysis is appropriate, given the strong growth in the money supply. This momentum will be even more drastic once the COVID crisis is really over .