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Stock markets are booming but the good times are unlikely to last

economist.com

21–30 of 71 posts

Re: Stock markets are booming but the good times are unlikely to last

#21

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

Wouldn't printing money have an inverse effect on the stock market?

If you devalue a currency by 1/10 and everything else is equal, then everything will cost 10/9 more measured in that currency.

Re: Stock markets are booming but the good times are unlikely to last

#22
post #8

Earlier quoted context omitted.

Which money printing are you referring to?

I think the US printed a couple of TRILLION dollars during COVID. The money hasn’t gone anywhere so if you’re American and don’t have the $80000 per person someone else has your cash. Edit: not sure why you’re downvoting! It was actually $3.3tn in 2020 alone which is wild.

Wild indeed. When the velocity of it picks up, we will see distortion and it will be hard to decide what a thing is worth. If everyone had a free 80K, i'm not selling my used car cheap anymore.

Re: Stock markets are booming but the good times are unlikely to last

#23

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

M1 and the Fed's balance sheet are down since 2022, though. What "money printing" do you mean?

The $4T that businesses got handed in march 2020, aka 20% of all USA currency ever printed. Don't think they aren't still playing with it.

Re: Stock markets are booming but the good times are unlikely to last

#24

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

M1 and the Fed's balance sheet are down since 2022, though. What "money printing" do you mean?

Anticipation of forthcoming lowered rates.

Re: Stock markets are booming but the good times are unlikely to last

#26

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

Another angle is the stock market is tech so how is centralised tech dominance doing? Is EEE going well?

Re: Stock markets are booming but the good times are unlikely to last

#27

The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.

Wouldn't printing money have an inverse effect on the stock market?

No, stimulus affects the market positively. It was a K-type recovery, the market went up and the real economy didn't. The market dislocated in the 80's and every decade or so we have a crash that makes the rich richer. Whatever comes along, they weasel more money from us and the government.

Re: Stock markets are booming but the good times are unlikely to last

#28
post #14

if technology continues to improve productivity, then the market will continue to rise accordingly.

Technology is improving productivity? We're still down half of what overall productivity was 20 years ago.

https://www.thirdway.org/report/missing-the-juice-whats-happ...

Re: Stock markets are booming but the good times are unlikely to last

#29
post #21

Earlier quoted context omitted.

Wouldn't printing money have an inverse effect on the stock market?

If you devalue a currency by 1/10 and everything else is equal, then everything will cost 10/9 more measured in that currency.

To a point. Who wants to own stocks in a country with hyperinflation. Of course this is a nitpick because it is unlikely to happen to the US anytime soon.

Re: Stock markets are booming but the good times are unlikely to last

#30
post #14

if technology continues to improve productivity, then the market will continue to rise accordingly.

Is that why it is rising?

Its mostly hype, if AI shows real improvements, chatgpt would need to cost a lot more than $30/mo, considering it takes thousands per user per month.
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