all things equal. take the tale of two companies each provided with equal capital, insight, leadership, and business plans 10 years ago
one selects a business plan of borrowing money to invest and benefit on an increase in commodity commodity prices
the other selects information technology, no debt, and growth through selling products to more customers
the loans come due for company one which cant be repaid or refinanced in the market (weak or non existent balance sheet company)
company two carries on with a growing business as usual (strong balance sheet company)
central governments and central banks elect to print money to purchase debt securities (indirectly and now directly, of weak balance sheet companies when the market will not)
http://www.zerohedge.com/news/2016-03-13/goldman-warns-its-clients-they-are-overlooking-largest-macro-market-risk
one selects a business plan of borrowing money to invest and benefit on an increase in commodity commodity prices
the other selects information technology, no debt, and growth through selling products to more customers
the loans come due for company one which cant be repaid or refinanced in the market (weak or non existent balance sheet company)
company two carries on with a growing business as usual (strong balance sheet company)
central governments and central banks elect to print money to purchase debt securities (indirectly and now directly, of weak balance sheet companies when the market will not)
http://www.zerohedge.com/news/2016-03-13/goldman-warns-its-clients-they-are-overlooking-largest-macro-market-risk
Fed tightening, especially contrasted with easing by the ECB and BOJ, should drive the dollar higher and benefit domestic-facing US stocks. As we discussed last week, our FX strategists expect policy divergence and interest rate differentials will drive the USD higher by 8% this year.
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