In the future the market will need more "genuine" growth as strong corporate balance sheets and sustainable economic activity, with less "supporting" growth on the part of central bankers, writes El-Erian said in a blog post on CNBC. This change is likely to happen in the United States, but will not happen any time soon in Europe.
Although the Dow Jones in the first quarter rose to 1987 with year's best mark, while the Standard & poor's 500 index jumped by 10 percent to investors, he said, "one has only to look at some other figures for the quarter, to feel the unprecedented and artificial nature of today's capital markets."
The stock market boom has coincided with a sustained ultra low yield on bonds, namely, the 10-year Treasury bonds fell by 1.85 percent, 10-year German Government bonds is at 1.29 percent, while the price of gold rose to $1,596 an ounce.
Where does such an unusual combination of shares, bonds and gold prices? Central banks, notably the Federal Reserve and the European Central Bank, will risk taking, lifting stock prices despite the slow economic recovery, the eurozone crisis recurring and ongoing anxiety about geopolitical risks.
In the coming weeks, he said, we'll get a better idea of whether the recovery is accelerating, and are the central banks continue to support asset prices. El-Erian predicts that they express their readiness to continue to support economic growth and employment.
"Actually the pledge is not difficult," he explains. Is much more difficult to steady the ability of central banks to retain control of a number of competing and conflicting forces.
He also said that investors have no historical precedents and reliable models to predict the future.
The volume and scope of operations of the central banks is unprecedented. Previously unimaginable means of capital controls were imposed one of the eurozone countries, and analysts remain concerned the geopolitical risks, "he writes, referring to Afghanistan, North Korea, Pakistan and Syria.
Although Central Bank intervention is sometimes necessary, he asserts, actions must be strong enough to compensate for the dysfunction of the Congress and foreign constraints. But when they are too strong, they will affect the functioning and integrity of the markets. "
Other commentators also called artificial market today, secured only low interest rates. Feda But Fed Chairman Ben Bernanke said that the policy of low rates is not Fedrezerva naduvaniem the stock bubble.
"The stock market there is nothing contrary to historical patterns," the Washington Times quoted the words of Bernanke.
Bernanke noted that share prices below all historical figures, if you make an adjustment for inflation.