3 ms·

I can't claim to be an expert in economics or finance, and I don't know if inflation per se is a threat at the moment, but I will say the current state of the e

by skohan 6y ago

I can't claim to be an expert in economics or finance, and I don't know if inflation per se is a threat at the moment, but I will say the current state of the economy doesn't make sense to me. If it really is the case that 30+ million Americans can be out of a job and the stock market reaction is to continue climbing on the assumption that the fed will continue to grow the balance sheet, doesn't that point to a fundamental decoupling between the value of the currency and real-world value? I mean are we really going to live in a society where the government pays companies so that their stock price can remain stable, even when demand for their products no longer exists because their customers are all out of work? It seems like a paper economy which essentially only serves to bail out investors. I'm not sure what the catalyst would be for that kind of a system to come crashing down, but I just don't understand how it could be sustainable.

josho 6y ago
The catalyst to a crash is when those 30 million people take to the streets and demand change. Unfortunately media has everyone misdirected to worry about guns/race instead of demanding the government serve the people instead of corporations.
- kitotik 6y ago
  It took a full two years after the 2008 transfer of taxpayer money to financial institutions for the Occupy movement to get going. It’s possible that the scale of the current corporate welfare program + health pandemic + inaccessible healthcare + unemployment leads to faster and larger response from the plebes.
- fragmede 6y ago
  The media is also doing a poor job covering possible/impending/discussions of rent strikes. The revolution, as they say, will not be televised.
_curious_ 6y ago
"I mean are we really going to live in a society where the government pays companies so that their stock price can remain stable, even when demand for their products no longer exists because their customers are all out of work? It seems like a paper economy which essentially only serves to bail out investors." To the last sentence, yes, a totally blatant wealth transfer scheme. Anecdotally, I think many of those suddenly "engaging" are just playing into the game - getting their dopamine and ego fix by showing dumb gains on nominal investments thinking that they too are wealthy and smarter than the next one :/ Of greater long term concern though is the decreasing transparency into which companies are benefiting disproportionately from government intervention. These fed manipulations will lead to an even more dysfunctional marketplace down the road because once the water is tainted - we don't know how much, where, or with what exactly. It's impossible to go back to safe and clean drinking water again from this source. Historically, the real value of the "stock market" has been that of a place for informed decisions based on consistent measurement and analysis of commonly reported variables regarding the well being of corporations. There's a reason a public company must abide by certain rules and regulations to go and remain public...it's so that investors can expect a certain amount of disclosure to actually make decisions on whether or not to invest. While public disclosure requirements have not changed lately (to my knowledge) - there is no way for the feds bailout factors to be decoupled from earnings. I would argue that aspect, which represents a huge value proposition of the "stock market" to investors of all sizes near and far, is quickly disappearing. I'm not sure what this means for the future.
berryjerry 6y ago
The thing is if America was a closed system then yes we would see massive inflation right now and a collapse of the stock market. But as a member of global community where everyone is the world is seeing the same financial problems, America is seen as the safest bet. People in other countries are investing in American companies and the American dollar more than ever. This is the only reason the stock market has not tanked, because it is still seen a safe bastion for your money. However, once unemployement stimulus runs out, PPP loans run out of forgiveness, bankrupcies begin to occur on a massive scale, and taxes have to be raised to cover more spending we will see a further crash. YOu can't just have 36 million unemployed people (which will be 50 million once PPP forgiveness runs out) and expect everything to remain normal. A large part of those people will not have a job to return as every company will try to cut costs.

by skohan 6y ago

josho 6y ago

The catalyst to a crash is when those 30 million people take to the streets and demand change. Unfortunately media has everyone misdirected to worry about guns/race instead of demanding the government serve the people instead of corporations.

kitotik 6y ago
It took a full two years after the 2008 transfer of taxpayer money to financial institutions for the Occupy movement to get going. It’s possible that the scale of the current corporate welfare program + health pandemic + inaccessible healthcare + unemployment leads to faster and larger response from the plebes.
fragmede 6y ago
The media is also doing a poor job covering possible/impending/discussions of rent strikes. The revolution, as they say, will not be televised.

_curious_ 6y ago

"I mean are we really going to live in a society where the government pays companies so that their stock price can remain stable, even when demand for their products no longer exists because their customers are all out of work? It seems like a paper economy which essentially only serves to bail out investors." To the last sentence, yes, a totally blatant wealth transfer scheme. Anecdotally, I think many of those suddenly "engaging" are just playing into the game - getting their dopamine and ego fix by showing dumb gains on nominal investments thinking that they too are wealthy and smarter than the next one :/ Of greater long term concern though is the decreasing transparency into which companies are benefiting disproportionately from government intervention. These fed manipulations will lead to an even more dysfunctional marketplace down the road because once the water is tainted - we don't know how much, where, or with what exactly. It's impossible to go back to safe and clean drinking water again from this source. Historically, the real value of the "stock market" has been that of a place for informed decisions based on consistent measurement and analysis of commonly reported variables regarding the well being of corporations. There's a reason a public company must abide by certain rules and regulations to go and remain public...it's so that investors can expect a certain amount of disclosure to actually make decisions on whether or not to invest. While public disclosure requirements have not changed lately (to my knowledge) - there is no way for the feds bailout factors to be decoupled from earnings. I would argue that aspect, which represents a huge value proposition of the "stock market" to investors of all sizes near and far, is quickly disappearing. I'm not sure what this means for the future.

berryjerry 6y ago

The thing is if America was a closed system then yes we would see massive inflation right now and a collapse of the stock market. But as a member of global community where everyone is the world is seeing the same financial problems, America is seen as the safest bet. People in other countries are investing in American companies and the American dollar more than ever. This is the only reason the stock market has not tanked, because it is still seen a safe bastion for your money. However, once unemployement stimulus runs out, PPP loans run out of forgiveness, bankrupcies begin to occur on a massive scale, and taxes have to be raised to cover more spending we will see a further crash. YOu can't just have 36 million unemployed people (which will be 50 million once PPP forgiveness runs out) and expect everything to remain normal. A large part of those people will not have a job to return as every company will try to cut costs.