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> Equity valuations in general could simply become so high that the ongoing fund flows required to keep them up at these levels could become insufficient, espec
by lumost 5y ago
> Equity valuations in general could simply become so high that the ongoing fund flows required to keep them up at these levels could become insufficient, especially as the Federal Reserve tightens its monetary policy in response to inflation. Upward momentum could turn into downward momentum, causing the marginal investor to shift away to other assets and other markets.
I'd honestly be curious if the Fed would try to shore up fund flows to keep stock prices rising. It sounds like an awful idea, and effectively amounts to a naked "let's make up money and hand it to rich people" play. But is it really that different from bond purchases?
- tobltobs 5y ago"Yellen says Fed purchases of stocks, corporate bonds could help in a downturn" https://www.reuters.com/article/us-usa-fed-yellen-purchases-idUSKCN11Z2WI https://www.reuters.com/article/us-usa-fed-yellen-purchases-...
- boppo1 5y ago> let's make up money and hand it to rich people" play. But is it really that different from bond purchases In my (frankly, barely educated) opinion, this is exactly what bond purchases are. I think it's the main factor in the increase of wealth inequality since 2008.