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Since economics shows that if everyone believes in 7% return , and capital is so efficient to move as it is now with digital systems, that grown would be alread
by knughit 11y ago
Since economics shows that if everyone believes in 7% return , and capital is so efficient to move as it is now with digital systems, that grown would be already priced in. Hence the absurd 50-100x P/E ratios we see. It is unsustainable.
- idanoeman 11y agoIt's only unsustainable if the underlying assets don't allow for 7% return in the long run. It's possible capital is scarce relative to the opportunities for investment such that 7% real returns are the norm. In that case, it doesn't matter if everyone believes in the 7% rate, there will be no crash.