5 ms·
hyperinflation is hyperbole. Our inflation: 5% since last year. Hyper inflation: ~50% per month https://www.investopedia.com/terms/h/hyperinflation.asp https://
by SubiculumCode 5y ago
hyperinflation is hyperbole.
Our inflation: 5% since last year.
Hyper inflation: ~50% per month https://www.investopedia.com/terms/h/hyperinflation.asp https://www.investopedia.com/terms/h/hyperinflation.asp
- thoughtstheseus 5y agoThe S&P 500 returned > 30% over the last year. Inflation shows up in many places.
- supermatt 5y agoInflation refers to the price of goods/services. Stocks are neither.
- thoughtstheseus 5y agoStocks represent the present value of future claims on consumption.
- imtringued 5y agoOk, now actually read what you said. If the price of stocks goes up without revenue going up that just means people value future consumption more and present consumption less. That has absolutely nothing to do with inflation. If anything, it's disinflationary.
- supermatt 5y agoNope. Stock represents the fractional ownership of a company, and its price represents the perceived value thereof. By all means use it as whatever indicator you like, but lets stick to the facts.
- ac29 5y agoI think they are referring to the "net present value of future cash flows" model for valuing stocks. Its one model that can be used to help determine the value of a company - the idea being that you aren't necessarily buying a company's stock for its earnings today, you are buying it for what it will earn over the time period you intend to hold it. Of course, that's not the only thing that determines stock price.
- thoughtstheseus 5y agoCool, tell that to Alan Greenspan. I wonder where that perceived value comes from?
- supermatt 5y ago> Cool, tell that to Alan Greenspan. Your word salad is your own, not Greenspans. > I wonder where that perceived value comes from? I believe that is the holy grail of investment. There are many different models that try to approximate it.
- thoughtstheseus 5y agoNo worries, if you have a question on something just ask. Greenspan popularized the view that excess capital flowing into stocks can be viewed as a form of inflation. There are limits (not strict) on short-term consumption so excess capital needs to go somewhere. Some of it goes into stocks until used for future consumption.
- supermatt 5y agoYou are misrepresenting whatever it is you think he has said. Greenspan has never said that "excess capital flowing into stocks can be viewed as a form of inflation". Higher price of stock being a potential indicator of inflation (due to the wealth effect, etc) is very different to it "being a form of inflation". Anyway, I don't care to continue this discussion as is. Please feel free to post references backing your redefinition of economic terms if you wish to proceed.
- thoughtstheseus 5y agoPlease don't post shallow dismissals. A good critical comment teaches us something.