[quote]But why do you think there has been so much investment in emerging markets and in global assets, commodities, etc.? Who do you think is behind all of that money? The financial institutions are behind a lot of that buying (hedging against inflation)[/quote]

The red graph seems to be back on trend of pre-crisis growth. It’s just normal dynamics of emerging economies. China is growing like crazy, for example, even though it’s very hard to invest there for foreigners. You can’t even buy and sell RMB in the forex market, you need to go through one of the state-owned banks and you need a special dispensation from the communist government.

[quote]BTW, do you really think stocks were undervalued in 2009 based on fundamentals (especially forward-looking)?[/quote]

Absolutely. Companies like AA or CAT were trading at single digit P/E’s.

[quote] Do you think the price increases around the world happened **in spite** of all that stimulus?[/quote]

I think that price increases are part of the trend. All those various forms of stimulus helped shorten the crisis somewhat, but they have not been big enough to make any inappropriate influences on prices. Most of them weren’t even real (like the aforementioned tripling of the monetary base), they were just moving digits around with no impact on the physical world around us.