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I would just like to point out the fact that the S&P 500 is almost four times higher capitalized than it was a decade ago. There are three obvious reasons for t
by sb057 5y ago
I would just like to point out the fact that the S&P 500 is almost four times higher capitalized than it was a decade ago. There are three obvious reasons for this that come to my mind:
* There has been massive asset inflation.
* The market is in a speculative bubble.
* The 500 largest American companies really are ~4 times more valuable than they were 10 years ago.
Even with #3, the best case scenario, that alone should be setting off major alarm bells, because their material contribution to society hasn't increased fourfold, so that increased valuation must be coming from somewhere, that is to say, control over society more generally.
- Iv 5y ago> their material contribution to society hasn't increased fourfold, If their contribution to the top 1% increased 400-fold, does that balance out?
- autosharp 5y agoAs OP said, > that alone should be setting off major alarm bells No I don't think that balances out unless you think the 1% is much more important than the rest of society.
- pfortuny 5y agoSaving is worthless is another reason. (I have said this above, though): if money today is worth less than money tomorrow, you want to get rid of it as fast as you can. People want to "save", anyway. This implies that the only way to save money is to invest it in risky assets. There is no point in buying bonds as investment for the general investor (only for hedging) if they will be worth less tomorrow than today -you are burning money, literally. Does this not look very much like inflation? (i.e. if you do not spend your money _right now_ you may not be able to buy anything tomorrow)..... It is inflation but Central Bankers do not want to see it.
- mewpmewp2 5y ago4. We could be very soon reaching productivity explosion. You might think it's 2., but market has to account for that.