"[Central banks can lower interest rates and thereby increase the affordability and demand for loans and the 'fair' value for equities and bonds:] As gilt-edged securities [bonds], both public and private, rise in price under pressure of the abundant money supply [which pushes down bond yields], funds flow ever-increasingly into lower-grade [riskier] securities and into equities, and into commodity, real estate and other markets. [As bond yields fall so company earning yields can fall - that is PE ratios rise - and still be attractive in comparison.] "
Allan Sproul
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