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You state govt keeps inflation low by manipulating how it's calculated in order to keep the fed rate low, which insidiously keeps stocks up. And this happens, a
by gizmo 5y ago
You state govt keeps inflation low by manipulating how it's calculated in order to keep the fed rate low, which insidiously keeps stocks up. And this happens, apparently, because the Fed really cares about news headlines? Does the ECB and BOJ enact the exact same policy but for unrelated (but equally conspiratorial) reasons? Are all the central banks and politicians around the world in cohorts, or is there something else going on here?
Long term interest rates have been going down for decades. This is a long term trend, caused by low GDP growth expectations. The labor force participation rate keeps trending down. Healthcare costs keep trending up. Population is aging. These are fundamental problems for which there is no great solution, and interest rates are low (along the curve) as a consequence. The Fed is ultimately only a minor player in this. They can provide excess liquidity, but only for so long. Ultimately rising inflation forces the Fed to withdraw liquidity and the market will inevitably deflate. Fed policy postponed a market crash by a couple of years so it wouldn't hit at the same time as covid, and that's a good thing.
But who benefits from a steady stock market? Regular people. Pension funds. Who benefits from crashes and wild gyrations? The wealthy. Hedge funds. This makes perfect sense, because a treacherous market is best navigated by the most experienced and wealthiest parties.
You seem to argue the opposite: that a market that has steadily gone up and up and up because of Fed/inflation manipulation has somehow benefited the wealthy elites at the expense of regular people?
Yes, workers get paid too little and much in the world is unfair. But your analysis is mostly conspiratorial silliness. I don't know what you mean by "ridiculous race war", but Black people in the US are 20x poorer (by net worth, on average) compared to whites so a race/color blind analysis of the economy doesn't work.
- spencerflem 5y agoYes, wealthy people own the vast majority of stocks. It's hard to invest a significant amount when 50% of your income goes to housing.
- VirusNewbie 5y agoThis is just factually incorrect that the stock market rising benefits 'regular people', the majority of stocks are held by the upper class. Your whole argument fails because of that.