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by trixie_ 2081 days ago
Everyone thinks the stock market is crazy.

The government is crazy - printing trillions of dollars this year, plans to print trillions more. The currency is will be devalued, inflation will happen. Investors see that and are getting out of cash and into stocks/crypto/property.

So is the market really up, or is it just the outlook on the dollar is down?
1 comments
bumby 2081 days ago
I'm not sure the recent evidence bears out this point. If you look at the strength of the dollar, it's actually UP since the ultra-low interest rates that started after the financial crises. Rampant inflation hasn't happened either.

I'm not smart enough to know if this is just a looming bow-wave or that the previous assumptions don't hold.

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pashamur 2081 days ago
Up compared to what? That's the key. The money printing is roughly synced between central banks (Europe is actually printing more), so the dollar is up relative to other currencies (since other countries have external debts in dollars and have a need for dollars).

If you look at dollars versus assets, gold, bitcoin, real estate - it's pretty clear that the dollar has lost significantly (it's just not obvious because all physical currency has depreciated in tandem)

The inflation that is happening is not happening in daily commodities - it's happening in the capital markets instead.

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bumby 2081 days ago
Yes, good point. It was implied that the dollar is up compared to other currencies.

I'm not sure gold, bitcoin, and real estate are great comparisons because they are too volatile to use as a real currency benchmark. Real-estate and gold have intrinsic value, I'm not sure how to divorce that for an apples-to-apples comparison to fiat currency.

>The inflation that is happening is not happening in daily commodities - it's happening in the capital markets instead.

I'm curious on your perspective with this. I was under the (maybe wrong) assumption that central banks are more concerned with controlling inflation for commodities...i.e., those things in the CPI rather than stocks. Do you think it should matter to them if capital markets are inflated? Real instability happens when people can't buy bread not when they can't buy $AAPL

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