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The relationship between more dollars and rising stock prices?
- Thread starter trader56
- Start date
Quote from misterno:
Read this thread in 5 years and you will see USD will have the same value after trillions and trillions of dollars will be printed by that time.
Impossible?
Wait and see
Look at the USD index from ALL history from the start.
I expect you will get quite a shock.
Your very statement is an oxymoron.
Of course we are seeing a bubble in the stock market. When interest rates are kept artificially low like they have been, it stimulates borrowing. With increased money in circulation the stock market stays propped up, artificially.
The real underlying problem is the currency devaluation. The dollar has lost 95% of its value since the inception of the Federal Reserve in 1913.
It doesn't matter if the inflation rate stays at 3%, its been higher, because without a relative increase in goods and services along with an increase in the money supply you are still losing value.
Holding dollars is the problem, and keeping your investments in financial assets opens you to the risks of inflation.
The amount of money that has been printed in the past 2 years to bail out wall street has debased our currency.
Many economists expect that the dollar will be worth no more than the paper it is printed on in the near future.
The real underlying problem is the currency devaluation. The dollar has lost 95% of its value since the inception of the Federal Reserve in 1913.
It doesn't matter if the inflation rate stays at 3%, its been higher, because without a relative increase in goods and services along with an increase in the money supply you are still losing value.
Holding dollars is the problem, and keeping your investments in financial assets opens you to the risks of inflation.
The amount of money that has been printed in the past 2 years to bail out wall street has debased our currency.
Many economists expect that the dollar will be worth no more than the paper it is printed on in the near future.
These articles like these summarize what has happened between more dollars and rising stock prices:
http://www.huffingtonpost.com/rj-eskow/the-trillion-dollar-shado_b_518019.html
ââ¦. But Sen. Dodd is still fighting efforts to have a full-scale audit of the Fed's other major bailout activities, including the $1.25 trillion program to buy mortgage-backed securities. That's been going at the rate of $10 billion per week - a massive program which ends this Wednesday.
You could argue that giving $10 billion every week to the people that wrecked our economy is like giving Viagra to sex offenders. (Remember last week's "controversy" about that?) And that $10 billion per week goes to buy the worthless assets of bankers who enriched themselves on loans that ranged from predatory to merely incompetent. â¦â
http://americanprofligacy.com/2010/02/17/1-25-trillion-dollars-of-worthless-real-estate-pt-2/
ââ¦.I questioned whether the Federal Reserve was over paying for assets that had clearly depreciated in value. Why else would a bank, bond holder, hedge fund or Government sell an asset unless they were getting a good deal? After all, these are Toxic assets. I made an assumption that since the housing market had lost 30-40 percent of its value that it was conceivable that the 1.25 Trillion dollars worth of garbage on the Feds balance sheet that they purchased at par value (100%) was probably worth a lot less. â¦â
So the U.S. government via the Fed bought all the toxic assets it could get its hands on for 1.25 trillion. In some posts on the web (I could not find the old posts) traders had postulated that the stock market jumped higher within a day or two of these big payouts during the 1.25 trillion buy back program. Thus began the speculation that the majority of this money from the Fed purchases was being used by banks and brokerages to drive up the stock market.
But there is more to this bailout program. Here is an example of what people think is coming soon:
http://z10.invisionfree.com/The_Unhived_Mind_II/ar/t29347.htm
â â¦The objective of Bernanke's $1.25 trillion quantitative easing program was to transfer the banksâ toxic assets onto the Fed's balance sheet. Having achieved that goal, Bernanke will now have to find a way to unload those same assets onto the public. Freddie and Fannie, which have already been used as a government-backed off-balance-sheet dumping ground, appear to be the most likely candidates.
Bernanke's liquidity injections have helped to buoy stock prices and stabilize housing, but the economy is still weak. There's just too much inventory and too few buyers. Now that the Fed is withdrawing its support, matters will only get worse. â¦â
http://www.huffingtonpost.com/rj-eskow/the-trillion-dollar-shado_b_518019.html
ââ¦. But Sen. Dodd is still fighting efforts to have a full-scale audit of the Fed's other major bailout activities, including the $1.25 trillion program to buy mortgage-backed securities. That's been going at the rate of $10 billion per week - a massive program which ends this Wednesday.
You could argue that giving $10 billion every week to the people that wrecked our economy is like giving Viagra to sex offenders. (Remember last week's "controversy" about that?) And that $10 billion per week goes to buy the worthless assets of bankers who enriched themselves on loans that ranged from predatory to merely incompetent. â¦â
http://americanprofligacy.com/2010/02/17/1-25-trillion-dollars-of-worthless-real-estate-pt-2/
ââ¦.I questioned whether the Federal Reserve was over paying for assets that had clearly depreciated in value. Why else would a bank, bond holder, hedge fund or Government sell an asset unless they were getting a good deal? After all, these are Toxic assets. I made an assumption that since the housing market had lost 30-40 percent of its value that it was conceivable that the 1.25 Trillion dollars worth of garbage on the Feds balance sheet that they purchased at par value (100%) was probably worth a lot less. â¦â
So the U.S. government via the Fed bought all the toxic assets it could get its hands on for 1.25 trillion. In some posts on the web (I could not find the old posts) traders had postulated that the stock market jumped higher within a day or two of these big payouts during the 1.25 trillion buy back program. Thus began the speculation that the majority of this money from the Fed purchases was being used by banks and brokerages to drive up the stock market.
But there is more to this bailout program. Here is an example of what people think is coming soon:
http://z10.invisionfree.com/The_Unhived_Mind_II/ar/t29347.htm
â â¦The objective of Bernanke's $1.25 trillion quantitative easing program was to transfer the banksâ toxic assets onto the Fed's balance sheet. Having achieved that goal, Bernanke will now have to find a way to unload those same assets onto the public. Freddie and Fannie, which have already been used as a government-backed off-balance-sheet dumping ground, appear to be the most likely candidates.
Bernanke's liquidity injections have helped to buoy stock prices and stabilize housing, but the economy is still weak. There's just too much inventory and too few buyers. Now that the Fed is withdrawing its support, matters will only get worse. â¦â
Pretty Simple. Would you rather earn 1 fiat dollar that represents nothing today which might be worth half as much due to dollar printing dilution.
OR
1 share in a multinational that represents assets,patents,land,etc. ??
OR
1 share in a multinational that represents assets,patents,land,etc. ??