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It's right there in the blockquote: investorsspeculators are buying shares on broker credit.

So no, obviously it's not QE money.

Bubbles are self-fuelled because the expectation of returns encourages speculators to buy shares on credit, and it encourages the brokers to lend for share purchases. After all, if share prices will go up, the loan pays itself, doesn't it? And the credit purchases are share purchases, so they increase share prices and so the positive feedback loop.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Mon May 19th, 2014 at 04:07:15 AM EST
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