Why Indian Stock Market is Going Up and Up?

Why Indian Stock Market is Going Up and Up?

Sensex is very near to the 21,000 mark, We are again back on the levels of January 2008. The Businesses have not show much growth in their profits and balance sheets than why the Indian stock market is going up and up?

Have you ever think this thing?

Well, the answer of this question lies in the above chart. The above chart is of US Monetary base means the money supply. You can see that in past just 2 years the US monetary base has shoot up to above US $ 2 Trillion (It has doubled since 2008).

And all of this money is created/printed out of thin air only. And this newly printed money has entered into the emerging economies like India and China which is artificially inflating the Indian stock market.

If USA won’t stop printing more money than very soon we will see Sensex levels 25,000, 40,000 or even 100,000…!!!!

Yes, This may sound crazy to you. But it is true. Anytime the hyperinflation will come and erode the entire world economy. In fact, US Government is planning to print more billions and trillions of dollars out of thin air which is going to dilute the purchasing power of the existing money in the circulation and the stock market may shoot up more.

The key interest rates in USA are 0.25-0.50% only. So it means that any investor can borrow money from the US Government at this much low interest rate and invest it in the emerging markets to make more money.

So I advise people to keep a close watch on US Monetary policies and key interest rates. When the key US interest rates will hike, its time to exit from the Indian stock market.