“And that is that the more effective policymakers have been in driving up valuations with all their extreme stimulus, the more dependent markets have become on the continuation of that same stimulus.

“Markets have become vulnerable, not to a shrinkage of central banks’ balance sheets, or a rise in interest rates, but just to a slow-down in stimulus.”

King points out that the situation is analogous to late 2018, when the US equity market suffered an abrupt 20 per cent fall.

“At that point, the US growth rate was above 3 per cent, and there was a big fiscal boost from Trump’s tax cuts, and the S&P 500 was making what were at the time new highs.

“Monetary policy was not quite as easy as it is today, but the US Federal Reserve thought it was perfectly appropriate.

“But suddenly, there was a 20 per cent drop in the S&P 500 that threatened to destabilise the economy. And the Fed was forced to think again.

“And I believe there…

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