Contrary to what a lot of the financial press has stated … the best environment for stocks is a very dull, slow economy that the Federal Reserve is trying to get going…. Once an economy reaches a certain level of acceleration … the Fed is no longer with you…. The Fed, instead of trying to get the economy moving, reverts to acting like the central bankers that they are and starts worrying about inflation and things getting too hot. So it tries to cool things off … shrinking liquidity … [While at the same time] corporations start having to build inventory, which again takes money out of the financial assets … finally, if things get really heated, companies start engaging in capital spending…. All three of these things tend to shrink the overall money available for investing in stocks, and stock prices go down…. Earnings don’t move the overall market; it’s the Federal Reserve board … focus on the central banks and focus on the movement of liquidity … most people in the market are looki...
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