What interest rates actually mean ! ! !

Martin Armstrong Now we come to the argument that if interest rates rise the stock market will decline. I am sorry. That is pure bullshit! Interest rates rise with bull markets and decline with bear markets. Look at Japan. Here is the Great Depression and the Fed kept raising interest rates as the market rallies. They then cut rates sharply as the market declined. So just where does this nonsense come from. The idea that the stocks will go down if the interest rates go up because it will cost more to borrow presumes everyone is leveraged. It also assumes the cost of business will rise lowering profits. The sad part of this reasoning is that it has been so prevalent. This is the reasoning that dominates the TV shows and spread the nonsense perpetually. Interest rates ALWAYS rise in bull market because people are investing. As the economy is expanding, people bid for capital because they see an opportunity. In Japan, interest rates are virtually zero. The market still does not rally because they see no opportunity. That is the key that is being ignored in this very shallow reasoning. All you have to do is actually demonstrate with evidence where this idea even comes from. Nobody can show the stock market rising with a bear market in interest rates. Impossible!