Magazine article The Spectator

The Cart Gets in Front of the Horse and the Bulls Are Ahead of Them Both

Magazine article The Spectator

The Cart Gets in Front of the Horse and the Bulls Are Ahead of Them Both

Article excerpt

Hear what they say and then watch what they do. As the partners in Goldman Sachs prepare to sell their birthright for a mess of caviar and yachts, their chief economist, William Dudley, says that the magnitude of wealth creation is without precedent. He is not, as it happens, talking about his firm but about the New York stock market. Trebling in five years and doubling in two, it has made so many people rich or richer that their newfound wealth is now driving the whole of the US economy forward. They can afford to save less and spend more, and so can the companies that they invest in. As a rule, markets reflect what may be happening in the economy, but in the world's biggest economy, things are the other way round. The cart is in front of the horse and the bulls are ahead of them both. They cannot be expected to stay in this order for ever. Mr Dudley worries about what would happen to them if the Federal Reserve tried to put the brakes on. …

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