A couple of months ago I heard someone on Bloomberg Markets saying that all assets were inexplicably rising at the same time -- stocks, real estate, collectibles, BTC, etc. And now it seems that all assets are falling at the same time. What is the underlying reason for this? One explanation that comes to mind is that people are selling all of their other assets in order to buy into the falling stock market. Or is it some underlying economic thing with the fiat economy?
If quantitive easing (QE, or 'money printing') is over, then free money is not being flung out to all and sundry (with nowhere to invest it, since interest rates have been so low) as it has been since 2008. Now things have been picking up, so inflation will come, and interest rates will accordingly rise.
Plus there is some doubt that Trump's tax giveaway is well-timed (at the end of a recession when things are hotting up and tax revenues should be paying back for 'the bad years'). If the tax break isn't right for now, and it means less revenue and more borrowing for the US gov't, then Gilts (government borrowing) will increase in rates because the USG needs to borrow more.
So rates go up and up, and suddenly gov't bonds are a better deal. So more money can stay safe in bonds - PLUS companies can't borrow to invest as cheaply, so make less profits. Perfect storm if it pans out and the US stock markets know it.
So shares are less of a good deal anymore and money doesn't need to look for new assets - if it's just easier to get higher returns from (safe) interest elsewhere via bonds and lending.
Why gold isn't rising is not clear - because more inflation means 'safe havens' should be picking up, but that may take time. Maybe paper gold is not what people want (which is what most of the gold market actually is).
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