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There is inflation. The dollar is incredibly weak right now on currency markets, relative to other currencies. Businesses that are not already sitting on large
by solatic 6y ago
There is inflation. The dollar is incredibly weak right now on currency markets, relative to other currencies. Businesses that are not already sitting on large piles of cash are bearing the brunt of inflation right now, as they get screwed between the rising costs paid to foreign suppliers and the stubbornly low prices that American domestic consumers can afford. The performance of the average American business has drastically decreased this past year, contributing to layoffs and making the problem worse. You don't see it in the stock market because the prices of stocks are being propped up by the Federal Reserve, but it's been an open discussion over the incredibly fast gains in the stock market over the last several months whether stock prices are coupled to corporate fundamentals or not.
- thrav 6y agoYou clearly believe the dollar is worth less, and is likely to be devalued further, but aren’t willing to tie that to the higher stock market prices?
- jonwalch 6y agoThere are many factors that go into stock market prices besides the strength of the dollar. With interest rates this low, there's hardly anywhere else to invest one's money.
- krupan 6y agoWith inflation, the price of everything goes up, from candy bars to stocks.
- solatic 6y agoCorrelation does not imply causation. True economic strength would result in both higher stock prices (reflecting stronger companies) and a stronger dollar (reflecting increased demand for those companies' goods and services). One needs to take the stock market prices in the context of the actions of the Federal Reserve and despite the weakness of the economy.