71–80 of 279 posts
Similarly in the drawdown chart, if it starts at 1987, it makes no sense to start the dollar at -81%. If I am looking at a chart from 1987 to 2022, I want to see how the dollar did compared to other assets in that time period.
No cryptos?
You can use ETFs that hold those assets, for example: https://totalrealreturns.com/s/GBTC,ETHE
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The total US stock market cap is $45T[1] and M2 is $20T[2]. Are you sure currency prices can't be influenced by the stock market? [1] https://www.statista.com/statistics/1277195/nyse-nasdaq-comp... [2] https://www.federalreserve.gov/releases/h6/current/default.h...
I think that just furthers the point- there isn't enough 'money' in M2 to 'pay' for all the stocks in the stock market. Yet there that value sits and real estate is another 20+ trillion in land value. In other words the actual 'money' is a transactional grease for the wheels of commerce- notational/bookkeeping mechanism. The sale of Apple (the largest value stock in America) as a whole probably couldn't be accomplish…
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Money (cash) is not wealth. Wealth can be created, or destroyed. The clearest explanation I've read for this was a PG essay: http://www.paulgraham.com/wealth.html specifically the "Money Is Not Wealth", "The Pie Fallacy", and "Craftsmen" sections. Of course this essay has a positive/optimistic take on it, but certainly wealth can be destroyed as well.
That's true, but I am not aware of any wealth indices, only price indices, and price indices can only increase and decrease relative to each other.
Term you’re looking for is “benchmark.”
How can everything go down at once, doesn't the money have to go somewhere? Best hypotheses so far along with how to test them: 1. Perhaps the parts of the CPI that companies in the stock market can produce are being outpaced by the components that are not produced, like real estate, and so can't contribute to an increase in share prices. (How to check: Look up changes in the CPI components, which are detailed in the…
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I think that just furthers the point- there isn't enough 'money' in M2 to 'pay' for all the stocks in the stock market. Yet there that value sits and real estate is another 20+ trillion in land value. In other words the actual 'money' is a transactional grease for the wheels of commerce- notational/bookkeeping mechanism. The sale of Apple (the largest value stock in America) as a whole probably couldn't be accomplish…
A change in preferences from holding dollar reserves to holding stocks could change the value of the USD, that's what I am saying.
also https://www.portfoliovisualizer.com/backtest-asset-class-all... has stock data back to 1971, it would be nice to go back that far.
Wish it had the 70s, or ideally, the whole 20th century. The 80s-2010s has been a period of unusually low inflation and consistent market returns, buoyed by the end of the Cold War and entry of the developing world into the world economy. There's a good chance that we revert to the mean going forwards and see much more geopolitical instability and resource constraints.