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The stock market in America just seems to have the same function as the property market in China, it's the primary thing everyone dumps their wealth in. If one

The stock market in America just seems to have the same function as the property market in China, it's the primary thing everyone dumps their wealth in. If one looks at stock market capitalization versus real economic output the ratio keeps creeping up. So either there's some miracle returns in the future or it's just more and more divorced from the fundamentals.

polishdude20 3y ago
Sooo, back to gold then?
- downrightmike 3y ago
  Opposite, China needs to get off land and that will allow them fiat to make up as much money as they want. Their big problem is that the workers aren't making enough money to keep the system running because it is all grifted by the state. Look at South Africa for what can happen when wealth isn't shared and the people can't support the economy because they are all too poor.
skybrian 3y ago
Based on a quick Google search, looks like US stock market cap is about $50 trillion [1] and real estate is $120 trillion. [2] (There's going to be overlap since businesses own real estate.) [1] https://siblisresearch.com/data/us-stock-market-value/ https://siblisresearch.com/data/us-stock-market-value/ [2] https://www.statista.com/outlook/fmo/real-estate/united-states https://www.statista.com/outlook/fmo/real-estate/united-stat...
- Barrin92 3y ago
  Okay but what's the argument in relationship to my post? As the article notes China's property market is larger despite a stock market cap of 10tn, similar in Japan real estate value is about 5x larger than Japan's stock market cap. That was the point, in the US stock market capitalization is unusually high compared both to other sectors and the economy at large.
  - skybrian 3y ago
    It's plausible to me that the US stock market plays a larger role than in other countries. But you said it's the "primary thing everyone dumps their wealth into," which is a stronger, more surprising claim, and I wanted to see if it was true. Houses still seem to be people's biggest assets?

polishdude20 3y ago

Sooo, back to gold then?

downrightmike 3y ago
Opposite, China needs to get off land and that will allow them fiat to make up as much money as they want. Their big problem is that the workers aren't making enough money to keep the system running because it is all grifted by the state. Look at South Africa for what can happen when wealth isn't shared and the people can't support the economy because they are all too poor.

skybrian 3y ago

Based on a quick Google search, looks like US stock market cap is about $50 trillion [1] and real estate is $120 trillion. [2] (There's going to be overlap since businesses own real estate.) [1] https://siblisresearch.com/data/us-stock-market-value/ https://siblisresearch.com/data/us-stock-market-value/ [2] https://www.statista.com/outlook/fmo/real-estate/united-states https://www.statista.com/outlook/fmo/real-estate/united-stat...

Barrin92 3y ago
Okay but what's the argument in relationship to my post? As the article notes China's property market is larger despite a stock market cap of 10tn, similar in Japan real estate value is about 5x larger than Japan's stock market cap. That was the point, in the US stock market capitalization is unusually high compared both to other sectors and the economy at large.
- skybrian 3y ago
  It's plausible to me that the US stock market plays a larger role than in other countries. But you said it's the "primary thing everyone dumps their wealth into," which is a stronger, more surprising claim, and I wanted to see if it was true. Houses still seem to be people's biggest assets?