17th August 2009

The good times are back. Credit spreads are narrowing, risky assets are recovering and commodity prices are bouncing back up. Even London house prices have posted a couple of months of positive returns. Those fearful of a repeat of the Great Depression have now been silenced by gigantic monetary and fiscal policy responses. Policy seems to be working and liquidity is coming back into the system. More importantly, the fastest acceleration in global money supply since the Asian crisis is also helping to repair asset values.