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by imtringued 1482 days ago
> The more money the government prints the more the stock market goes up.

This printing nonsense forgets that accounting is a two sided relationship ...

Yeah sure the government does something but did it initiate or did it respond to something someone else initiated.

Instead of arguing the government did something, you can equally argue that the private sector did the opposite. Remember the earn more than you spend story that everyone is supposed to follow? It is obviously impossibly because where is the saved money coming from? Someone needs to obligate themselves to be liable for those savings and it turns out the government wants to be liable.

If the stock market is booming, expect it to be the result of people earning and therefore producing more than they spend and therefore consume. The excess has to be invested somehow and the most prominent investments are available on the stock market. That is the reason why the stock market is going up so high and interest rates are so low. Lots of people producing and investing the surplus. Not many consuming the surplus.

The moment people produce and save but don't invest, you get deflation which generally results in unemployment and debt defaults which is undesirable. So the government acts as the borrower or consumer of last resort.

What would the market look like if we corrected for the money supply? You would see negative or zero yields in the stock market.