Lune, I barely know where to start. As you read this post, please forget everything you 'learned' from your Marxist professors.
First, a company (and therefore stock in said company) is the definition of a 'real revenue generating asset' as most companies pay dividends, or buy back shares which increases the stock price and is functionally equivalent.
Second, when the Fed increases its balance sheet, it increases the amount of money in circulation. In a bull market, no one wants to have cash when they could own real assets that are appreciating. But every sale just transfers this 'hot potato' money from one owner to the next. This drives prices up
for all assets, whether it's stocks, real estate, bonds (remember for a bond a higher price is a lower interest rate), artwork, you name it.
Third, are you not aware that the S&P has completely recovered, and is in fact at nearly twice its peak at the dot com boom? And **30 times** higher than it was at the start of the 1980s bull market? According to
Gallup only 20% of the bottom quintile own stocks. Even people like me that do relatively well still earn most of our money from our labor. But the 1% see their wealth change directly in proportion to the value of real assets. It doesn't take a genius to see that pumping all of those assets by a factor of two with low interest rates 'because we need to stimulate the economy' will massively favor the ultra wealthy. And this, ultimately, is why Trump is president.
11-10-2018, 07:03 PM
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