Toofargone

Once again I am proven right. It may very well be some kind of manipulatation.

We know that PE is price/earnings. An example: a price of 100 and earnings of 5 makes PE 20.  A PE of 20 means that the return on share price is 5%.

Economies repeatedly undergo expansion and contraction cycles. It is all related to spending. Spending depends on two factors: 1. Income - It rises due to increased productivity or spending by someone else. 2. Credit - Easy credit leads to increased spending. One person's spending is another person's income. If income rises, creditworthiness increases. Coupled with loose credit policies, this gives rise to expansion and increased debt levels. If the debt levels become higher than what can be serviced through income, recession occurs where people cutback on spending etc. Lowering the interest rates is one way to counter recession. Deleveraging occurs when the debt becomes too much and lowering interest rate is not an option because they are already zero. The objective is to reduce the overall debt. 1. People and businesses cut spending in order to pay off their debts. This is deflationary. 2. Debts are reduced by restructuring. 3. Redistribution of wealth occurs. 4. Cent...