441–450 of 542 posts
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Yep, it's overall quite pessimistic from my perspective. Despite them, I've been buying diversified indexes all throughout this year. The gains have been absolutely beautiful. :)
Because we know too much.
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Printing money has not had much impact on consumer prices. But it seems very plausible that it is causing inflation of asset prices, including equities, and that that is a distortion of the market that could have negative long-run repercussions.
This is the most important and often under-looked thing in this whole thread. This will further lead to wealth gaps and difficulty for working people to "get ahead".
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Why is it smart to do this? Bitcoin took a dive earlier in the pandemic. Why would it be counter "the world is crashing" now? The us is still the world's reserve currency. If the us keeps circling the drain economically and financially and especially politically, we have so much power and raw capability to come back. The big problem is covid-19, where the world can leave us behind as we slowly kill ourselves off. Hmm…
>Hmm, I'm almost convincing myself that even us $ could eventually not last. So, I'll just take one of those job offers on hacker news that says we'll get you a visa to come to Amsterdam? You realize that the world economy is inexorably linked to the US right? If there was such a devastating crash what makes you think the Eurozone would be stable? The UK left the EU and France nearly did, a massive wave of unrest cou…
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But it is different this time. Productivity growth is slowing [1], people are aging rapidly (in the US, baby boomers are retiring at a pace of 10,000 people per day, 5,000 of them die per day) [2], and secular stagnation is taking hold in most first world countries [3]. Sort of strange to expect today or the next 50 years to look like the last 50 years. [1] https://scholar.princeton.edu/sites/default/files/ernestliu/…
Yeesh, sounds like Japan in the 90's!
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>I believe we are about 9months away from the greatest financial disaster of our times Why 9 months? What would precipitate that?
By nine months it will be a debt crisis which has become a liquidity crisis which then forces a fire-sale of assets.
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Today was one of the few times I saw "social unrest" mentioned in this context. I suspect that will happen a lot more over the next few years. The markets are a wobbling shitpile of unpayable debt just waiting to collapse. That was already true before Covid, but Covid has nailed the coffin shut while the corpse is still alive. I wouldn't be surprised if the Fed is knowingly goosing the twitching body because the alte…
Don't forget that the FED works closely with the WH, so it's in everyone's interest in that administration to keep the music going until the election.
At least we can dispense with the idea that the stock market is driven by short-term thinking. Prices are high because investors expect things to be better in the future, even though things are bad right now. Maybe the investors are wrong, but at least they are thinking about the long term, or at least the intermediate term.
I think prices are high b/c retail investors are being taken for a ride and have no other recourse. A ton of cash has been injected into the system. People are rightly concerned about inflation. What do they do? Bonds aren't a good investment. Real estate will be affected by unemployment, so that's not an option. No one gives a crap about gold any more. Plus retirement funds carry insane penalties. It's not like pull…
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Gold isn't a "fiat" currency. It's a commodity that acts as a store of value. A fiat is paper which is asserted to have a specific value (likely unenforceable in a post-apocalyptic world). A commodity has a value because that's what the market will bear. Gold does have intrinsic value. It's used for electronics plating and for jewelry. Other precious metals can augment gold as commodities, each having different intri…
Would a post-apocalyptic world really care about electrical conductors and crafting new jewelry, though? It feels like everyone is making assumptions about what people would want in such a world.
But the idea that gold doesn't have some sort of special status is strange to me. People don't talk about doorknobs or topaz when they diversify from financial products (stocks, bonds, cash, etc). Cryptocurrency fails to be useful if there is no reliable electrical grid or network. Gold has for long recent history (until about WW1) backed almost all currencies, so it has significant precedence.
And jewelry is useless to me, but most people carry some form of jewelry and some cultures even store lots of gold in jewelry in case they need to run/escape. It's not useless to have a store of value shaped to fit your body.
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Is part of the issue that there is just too much money has been printed and hoarded and its creating some weird effects? The government has been printing money for a long time, to stimulate the economy, provide spending money, etc. Due to 80/20 rule, rich get richer effects, etc, a large portion of money the government prints ends up in the hands of a relatively small group who doesn't spend it but rather tries to in…
It's not just "rich get richer". It's also that everybody bought into the "just buy the market" idea hook line and sinker. Pension funds, individual investors, everybody. How retirement works on paper: you save the money by buying the market and get 20% more when you retire in 40 years. How retirement works in reality: younger people work to supply the old with food and medical care. The real transfer is happening no…
Where did this number come from? At 4% compounding over 40 years, you will have at least 130% again over what you put in.