Our news reports give us scant reasons why stocks fell so much recently. We heard the usual one-liners. We heard “concern about inflation.” We heard “The market is due for a shake-up.”

What we did not hear was much news about the real cause. Which is a pity. Because the real cause has also brought down a lot of other prices.

Real estate prices have fallen of course. Not just here, but in many countries.

Gold prices have fallen a lot, and suddenly. Silver prices have fallen even more. And just as suddenly. Stock prices fell here. They also fell in markets around the world. The largest tumble was in Japan. Even oil prices have slackened off.

All these prices are tied to liquidity and inflation. Ho hum, liquidity. Whatever that is.

If you don’t know what it is, you might want to spend a minute to read about it. After all, it affects a lot of prices in your life.

First, inflation. Inflation is when there is too much money chasing too few goods.

Liquidity is when there is too much money. Central banks like the Fed can control liquidity.

Now, we like to have liquidity - a lot of cheap money - following a crisis like 9/11 or the dotcom bust. When investors can lay their hands on a lot of cheap money they are more likely to keep investing after a calamity.