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The bubble was popped when stocks dropped like an anchor in March 2020. It's free fall was stopped by printing a lot of money. The question is, if another even
by nine_zeros 5y ago
The bubble was popped when stocks dropped like an anchor in March 2020. It's free fall was stopped by printing a lot of money.
The question is, if another event happens, will the fed stop the free fall? I bet yes because they only have one tool to address this problem.
Which means taking debt is low risk forever because the fed will always print money and save you the trouble of losing your money
- yenwel 5y agothe fed already stepped in with money printing before covid was already a thing because of a corporate debt bubble about to burst https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-powell-flags-corporate-debt-surge-some-businesses-may-come-under-severe-financial-strain/?sh=46e95f9f1512 https://www.forbes.com/sites/pedrodacosta/2019/06/03/feds-po... (a bit like the subprime mortgage bubble but for corporate debt) Those faulty and badly managed companies got even more free money injected and are even more addicted to near zero interest rates because of covid... Now if inflation becomes to high for consumers the feds have to choose between consumers or once again rescueing those companies when setting interest rates. Neither will turn out good
- timeinput 5y agoThis is somewhat tongue in cheek, but refinancing a 30 year mortgage and taking out the equity every 5 - 10 years and putting it anywhere else sounds awfully reasonable when the loans are so cheap. It feels *weird*.