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by vorpalhex 1609 days ago
> money out of a bubble has to go somewhere...

Inflation. Food, bills, gas, etc.

> How far are we from the boomer generation leaving the market (one way or another)?

20-30 years, during which time the younger generations will be entering. They are smaller slightly but most countries have immigration which keeps them fairly neutral.

> The answer to that is that we've been doing that already in the past decade with all the money printing / inflation / devaluation of wealth

This is not quite correct. Printing money does create inflation. Cross sector inflation does lead to devaluation of liquidity, but wealth includes more than cash on hand.

1 comments

Your food and gas bill goes into the income statement of a corporation somewhere, and thus supports stock values. Even if stock prices decline, they will be better value because the companies will be making money
The prices are raising due to fundamental cost. The cost of making your Big Mac or frozen burrito are increased.

Thus, BigCorpFood has to manage price (too expensive and less consumers buy their products) and cost (too much cost means no profit).

BigCorpFood would really like to sell you a hundred frozen burritos at $0.99 that cost them $0.09. That would be ideal.

Less ideal but realistic would be selling you frozen burritos at $2.99 that cost $2.79

Even less ideal - but still workable for short periods of time - is selling you burritos for $2.99 that cost $3.10

What BigCorpFood doesn't want is to sell you frozen burritos at $9.99 that cost $9.79. That is really bad for them. They will sell very few of those burritos, and make almost no profit.

BigCorpFood stock price is more about introducing "New Deluxe Spicy Chicken Burrito, available for $3.10!" that cost $2.75. If eg Beef is getting more expensive and BigCorp can sell you cheaper chicken thigh and save a profit margin, that will help their stock a whole bunch.

ps: Oh, and re "your food/gas prices go into the income statement..".No, they go into the revenue statement. Income = Revenue - Cost.

The money goes around in a big circle. The big mac is pricier because the price of beef went up, for example. So the farmer is making more money. Or perhaps the supplier of feed to the farmer. Somewhere, someone is making more money; it’s not like there’s a link in the supply chain where all the do is set money on fire.

Also: sales is recorded on the income statement, no-one claimed that sales = income.

Right, the income statement does include revenue.