4 ms·
>All got to go up sometime. Why?
by Finnucane 7y ago
>All got to go up sometime.
Why?
- whatshisface 7y agoWe're not near any fundamental limits on growth. They exist, but the economy can get a lot bigger before it hits them. I have heard some really daft arguments about it ("the observable universe is finite!") and some less daft arguments ("resource shortages are more likely than asteroid mining within our lifetimes") but all of these predictions are for things a long time in the future.
- Finnucane 7y agoOr even "our political economy is managed by corrupt morons who would rather see the world burn than deal with our actual problems."
- reroute1 7y agoJust because you aren't at the limit doesn't mean that it will go up though
- whatshisface 7y agoYes, it does. All of the processes that have driven growth in the past are still working, and they will until they reach their limits. That's what it means for them to have limits. Why would people stop engaging in economic activity while it's still possible to do so?
- blackflame7000 7y agoBecause the markets are funded by people and people are irrational.
- ethanbond 7y agoWell, it doesn't really, but if it doesn't then it won't matter much where your money is.
- justinmeiners 7y agoJapan has had stagnant stocks for decades and isn't in collapse.
- wsc981 7y agoI view it as such: do you believe we have achieved peak efficiency with regards to production of goods and providing services? If not, there’s room for the economy to grow. I am not an economist though, this is just my layman’s view.
- jjeaff 7y agoThe actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. What you actually have to figure out is: is there any unexpected future efficiency gains that the market doesn't expect. You have to know something that the market does not.
- strbean 7y ago> The actual question is whether the market thinks that future efficiency gains are on the way or not. If the market does, then that efficiency is already priced in and you can't make any money off of it. Isn't this ignoring opportunity cost, uncertainty, etc.? If the expectation of future gains is priced in, wouldn't treasury bonds sell for face value + remaining interest on the secondary market?
- outworlder 7y agoI guess they are assuming perfect knowledge.
- strbean 7y agoI'm sure all the players are acting rationally as well!
- turc1656 7y agoThis isn't quite true. I get what you're saying, but from a technical perspective, it's not accurate. The markets also go up based on the total money supply in the system. If the government takes on a lot of debt, eventually a portion of that makes its way to the stock market, among other places. You don't actually need to improve efficiency/productivity if the government has tools like the discount rate, open market operations, the ability to alter margin requirements on derivatives, fed funds rate, as well as programs and policies like MMIF, TAF, CPPF, ABCP, TALF, ZIRP, to manipulate the money supply and the velocity/flow rates of money.
- nightski 7y agoAt the very least wouldn't inflation cause an upward trend even if small?