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The poster is also mixing up a lot of concepts. There's a glut of cash worldwide so naturally that affects European banks as well, and they may choose to put it
by bko 5y ago
The poster is also mixing up a lot of concepts. There's a glut of cash worldwide so naturally that affects European banks as well, and they may choose to put it in USD since their rates are negative.
I like how someone can read a story about banks having too much money and not being able to lend it out fast enough, resorting to parking it in an incredibly low yield asset and the take away is "aha! see inflation is not and will not be a problem! Central banks don't actually print money"
Gold may be a shitty inflation hedge this go-around. But the stock market doesn't appear to be. Do you think its weird the stock market is up 30% from the peak prior to a global pandemic? Where do you think that money came from, or is that just optimism, because you know, we all handled this pandemic so well?
- bluecalm 5y agoIt's natural stocks go up if no one has to sell (because credit is cheap) and economic opportunities are limited. My read on the situation is that stocks were criminally undervalued for decades and just recently started reaching sane valuations. It's a good thing as well. It shouldn't be the case that you can earn 5%+ a year for doing nothing. P/e ratios in 30s and 40s are the new normal at least for big established companies.
- bko 5y ago> My read on the situation is that stocks were criminally undervalued for decades and just recently started reaching sane valuations. PE ratio is pretty high historically, only higher briefly in 2000 and 2008, both before huge corrections https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...