The post France’s CAC 40 Is Another Nail In The “Fed-As-Market-Opium” Narrative appeared on BitcoinEthereumNews.com.

A picture taken with a zoom effect shows the CAC 40 amongst stock tickers displayed at the … More headquarters of the Pan-European stock exchange Euronext in La Defense district, near Paris, on April 27, 2018. (Photo by ERIC PIERMONT / AFP) (Photo by ERIC PIERMONT/AFP via Getty Images) AFP via Getty Images France’s best-known stock index, the CAC 40, is up 18 percent over the last twenty-five years. The S&P 500 is up 24 percent over the last two months. These numbers rate comment. For one, they vivify the stupidity of so-called “trade deficits” in the U.S. There’s no such thing, nor is there such thing as insufficient savings in the U.S. that are made up for by foreign savers. More realistically, the United States is the world’s most economically dynamic country, one populated by the world’s greatest companies. See S&P returns over the last two months, two years, ten years, etc. The CAC 40’s flat returns explain a broad desire among individuals the world over to export their savings to the U.S. so that they can import shares in the U.S.’s many great companies. In other words, the so-called “trade deficits” that keep politicians and pundits up at night, and that shrink the charitably worthless calculation that is GDP, are a powerful signal of economic strength. For the U.S. A flat CAC 40 over twenty-five years also lays waste to a just-won’t-die notion that the Federal Reserve’s low rates have been the not-so-hidden source of stock market strength throughout the 21st century. The view, a popular one inside the various U.S. economic religions, was always bogus. That’s because markets logically gain strength from periods of weakness. It’s when equities are down or falling out of favor that the poor and mediocre are put out to the proverbial pasture…

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Filed under: News - @ June 15, 2025 2:18 pm