When the money supply is inflated the markets will go up...
I would like to see a DOW chart that is indexed off the REAL value of money....
ABSOLUTELY! What we are seeing is the devaluing of the currency but hard assets (corporate property, equipment, facilities, etc.) have “intrinsic” value. We are also seeing both inflation and cost reduction at the same time.
For example, if an asset (a tractor for a semi) takes 1000 man hours to produce and $10000 in materials at the days rates it is created, then it has a “value” baseline. If that man hours to produce cost $10 then we have a $20,000 baseline “value”. The sales PRICE at the baseline date is $30K (50% markup).
If the currency is debauched (devalued) so that it now buys LESS than before, say the currency is only worth 1/2. Then that same $20K base “value” is now $40K AND the $30K sale price is now $60K.
On top of the “funny money” games the interest rates are being kept ARTIFICIALLY LOW! So that businesses, and banks, can acquire capital more easily. Cost of goods and services rises, the “inflation” is built into the price of everything, and the “profit” goes up. Because the “profit” is with cheaper dollars that are actually worth less than before.
ABSOLUTELY! What we are seeing is the devaluing of the currency but hard assets (corporate property, equipment, facilities, etc.) have “intrinsic” value. We are also seeing both inflation and cost reduction at the same time.
For example, if an asset (a tractor for a semi) takes 1000 man hours to produce and $10000 in materials at the days rates it is created, then it has a “value” baseline. If that man hours to produce cost $10 then we have a $20,000 baseline “value”. The sales PRICE at the baseline date is $30K (50% markup).
If the currency is debauched (devalued) so that it now buys LESS than before, say the currency is only worth 1/2. Then that same $20K base “value” is now $40K AND the $30K sale price is now $60K.
On top of the “funny money” games the interest rates are being kept ARTIFICIALLY LOW! So that businesses, and banks, can acquire capital more easily. Cost of goods and services rises, the “inflation” is built into the price of everything, and the “profit” goes up. Because the “profit” is with cheaper dollars that are actually worth less than before.
Adjusting due to inflation caused by quantitative easing, i.e inflation I presume?
This individual seems to confirm what I have heard; that the Federal Government is supporting directly or indirectly the recent market rise. Those managing our government recognize that most Americans learned that the stock market signaled poverty or prosperity. Thus, the government managers inflate the market to lull the people into a false sense of prosperity. Pure propaganda!
This is a pure melt-up due to “liquidity”. People who are happy with money-printing claim there is little inflation. Well, “inflation” is the act of bloating the money supply. Once the central bank pushes the newly printed money into the economy it cannot control what effects it will have and where.
Two cycles ago, the “liquidity” went into dot com stocks. That didn’t work out too well. After 9/11/2001, it went into housing. That didn’t work out too well. Now it appears to be going into bonds and secondarily into stocks. Look out below!
This is a classic case of “pump and dump”. Media will crow about how well the stock market is doing for a few weeks drumming up a lot of interest from the low information voter that will turn from safer investments to stocks while people in the know divest stock and invest in hard assets.
The RATS are about to jump ship and are suckering in the ignorant masses and leave them holding the bag.
Forget history. This country is in uncharted territory.
This will be one for the history books and I feel it will end badly.
“Industrials” have not comprised most of the Dow index for a very long time. Even the language, “American-based” arouses suspicion that associated manufacturing doesn’t happen on US soil.
The Dow is based much on funny money from debt, so it could possibly go up, in general (with the usual fluctuations), until the bond collapse happens. Most incomes are based on funny money, by the way: recirculating debt. When many more investors flee bonds, that’ll be all she wrote.
Who cares why it happened, the clear result is that everybody who has been calling for a market crash over the past 4 years has been an idiot.
Saying “we would have been right, EXCEPT for these things”, just shows that they failed to take into account the effect of “these things”, whatever those things were.
The market could crash tomorrow. And no doubt, there will be 100 analysts the next day who will brag about “calling” the crash.
But my guess is most of them would be broke if they invested based on their own “calls”.