By Patrick O’Leary of Eureka Report


The fundamental underpinnings of the global bull run show that this is not
another mad New Age phenomenon that depends on investors being sucked into
improbable paradigms. It has very little to do with miraculous new technologies,
or with reckless damn-the-torpedoes portfolio strategies. Nor does the
underlying rising confidence in shares seem to be due to a fugitive displacement
of funds that would otherwise be parked in the property, fixed interest or
commodities markets. On the contrary. We have asset prices rising across the
board as well as across the globe. How can this be?

In short, it is because the world economy continues
to grow at a healthy nominal rate of about 8% a year — an average of,
say, 5% real and 3% inflation — that will double global GDP
within 10 years. This is being accomplished on the back of an irreversible
combination of population growth in the developing economies, free trade and
capital flows, strong productivity gains and abundant liquidity. And, while these
powerful factors remain in play — despite terrorism, energy-price shocks and
falling unemployment — inflation will stay reassuringly low, and so will
interest rates. The old business cycle has lost its sting and we can at last
afford to take a long view as strategic investors.

Read more here.