At present, financial markets seem to be enjoying a little "run" that has been based on rumours of an impending Chinese economic recovery and better liquidity trends within the US. At present, the former factor really is only "rumour"; some of China's more recent economic data has looked a little better but the data is patchy and not always that accurate. We can, though, be more definitive over US liquidity trends, which have begun to look quite robust despite what seems to have been a marked failure of Bernanke's latest QEP to gain traction. In fact, the cause of the latest surge in US liquidity has not been the Federal Reserve but the Federal Government itself.
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