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Productivity has increased globally so it takes less people to achieve a greater result. The world has also grown significantly in the last two decades in terms of purchasing power, while developed nations have seen their growth slow or stagnate. I'm sure there is some bubble aspect to the stock market as the FIRE sector is sorta up to it's old tricks again. However, I think the stock market, more than less, reflects the nature of the new global economy. India has a billion people who aren't where China is and Africa has a billion people not where India is in terms of modernization.
America's best bet is to fix up entitlements, cut the world police and meddling crap and build, build, build more electric grids, roads, bridges, highways, mass transit, water treatment plants, etc.
The government has interjected billions if not a trillion dollars into the markets and you agree that there is some bubble effect?
It's also the psychological effect. Investors are told to not worry because if things go bad the government will be there to save them again.
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Quote:
Originally Posted by whogo
The stock market is a large part of the real economy.
How so? How is what has evolved to little more than smoke & mirrors 'real'? How can you consider a market so easily manipulated by a runaway computer rather than actual market conditions 'real'?
The government has interjected billions if not a trillion dollars into the markets and you agree that there is some bubble effect?
It's also the psychological effect. Investors are told to not worry because if things go bad the government will be there to save them again.
This is exactly the problem. There never has been a completely free market, but removing risk from investment creates something that is antithetical to capitalism.
This is exactly the problem. There never has been a completely free market, but removing risk from investment creates something that is antithetical to capitalism.
Arguably its capitalism at its finest, someone else taking the risk while you take the reward.....that being said...its a really really bad bad BAD thing.
Arguably its capitalism at its finest, someone else taking the risk while you take the reward.....that being said...its a really really bad bad BAD thing.
Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
It has everything to do with it, with the intent to move to a plutocracy. A plutocracy can still be capitalistic.
But really we are debating semantics. We are in 100% agreement that its bad correct?
Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
It has everything to do with it, with the intent to move to a plutocracy. A plutocracy can still be capitalistic.
But really we are debating semantics. We are in 100% agreement that its bad correct?
The government has interjected billions if not a trillion dollars into the markets and you agree that there is some bubble effect?
And the global economy is tens of trillions dollar strong. I think there was some bubble effect, again, the market is more of a reflection of our current economic times.
Quote:
It's also the psychological effect. Investors are told to not worry because if things go bad the government will be there to save them again.
If you want to promote better financial behavior then we will need to separate commericial and investing banking again. While I'm not against the notion of bailouts, we need better legislation so we aren't put in such a dire position.
Part of the reason why the stock market is at an all time high is because there's not enough investment in the real economy. Why no investment?
Corporations aren't investing in the real economy because they've learned how to get the same results with less human capital. We have our legislators to thank for this. In addition, corporations prefer to make their shareholders rich, while maintaining levels of productivity without growing their businesses through reconstructing titles.
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