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Elon Musk and the Dangers of Another Stock Bubble
- 1cvmask 5y agoStock bubble's, like almost all asset-price inflation, can be pricked by central bankers around the world by raising interest rates. The one thing holding them back is the fear from politicians as the debt-to-GDP ratios are at all time highs (if you exclude the World Wars eras). Even is they may seem independent they really are not. On that note Biden kept Powell as chair of the Fed: https://www.bbc.com/news/business-59340779 https://www.bbc.com/news/business-59340779 - There are of course other instruments that can be used to prick asset-price inflation like taxation measures and making the holding of assets more costly. But that is unlikely. In fact they just gave a huge tax break to the rich: https://www.theguardian.com/commentisfree/2021/nov/22/democrats-are-pushing-tax-breaks-for-the-rich-theyll-cry-when-voters-punish-them https://www.theguardian.com/commentisfree/2021/nov/22/democr...
- maerF0x0 5y agoOne thing this article fails to mention is currency devaluation. All this price (and revenue) growth is in USD. If holders of USD are considering it as relatively less valuable in the future, they'll bid up an asset they see as more stable. I see cryptocurrency prices similarly, it's not that bitcoin is super valuable so much as people are afraid to hold USD in the face of inflation.