Why I Don’t Trust This Rally

This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
Stocks kept rallying last week despite the fact that economic conditions are not improving anywhere in the world.
Investors predictably celebrated the European Central Bank’s (ECB) decision to lower interest rates further below zero and to buy more debt (including investment grade corporate bonds) in a continuation of its desperate efforts to revive a moribund European economy.
The fact that investors are willing to celebrate government actions to confiscate their savings through negative interest rates illustrates the short-term mentality driving markets closer to a day of reckoning.
You just cannot grow economies by destroying capital, yet that is precisely what negative interest rates accomplish.

This post was published at Wall Street Examiner by Michael E. Lewitt ‘ March 13, 2016.