Fed to buy stocks? Bye bye capitalism/free markets!

a reply to: EnigmaChaser

It's all on cruise control now.

UBI tested
Socialized unemployment
Government takeover of industry

So fast and willing were the American people over a virus. And not a too serious one either.

Anyone else hear that flushing sound?

The Fed has done nothing but support the market for the last 10 years. They didn't buy stocks, they just gave loans to hedge funds to buy stocks. Markets haven't been traded freely for a very long time. If they did and the government / Fed didn't prop them up all along, they would be trading at fractions of their current values. We either have government intervention in the markets or they go down 70-80%. The thought of a 70-80% decline with most biz going bankrupt seems less palpable then having the Fed buy stocks into a completely managed economy. Truthfully the only thing that really matters is that we have enough to eat and a roof over our heads. Fed buying stocks will ensure that we can have that.

a reply to: MPoling

Yes, US Debt is up, but so is US income (tax revenue) - its all relative. Its true income growth in the US has been a joke for a long time (except in the upper echelons.)

a reply to: muzzleflash

It's an interesting time to say the least.

I don't know where we are going but I highly doubt it's backwards. Never underestimate the youth either, they really want change.

a reply to: sligtlyskeptical

But a time will come when there's no more road for that beaten up can.

We haven't seen the real effects of a closing down global economy yet.

a reply to: Bigbrooklyn

Are you sure ? im sure he'd more proud to see the USA as being owned by corporations and powerful individuals
supporting senate and influencing legislation the merger of corporate and government power.

Not social welfare , or social healthcare

originally posted by: RAY1990
a reply to: EnigmaChaser

So how does a company that trades/produces a commodity that has not changed in value over 5 years become worth 20% more over the same period?

The demand hasn't changed for the commodity traded either. Explain that to me without mathematical wizardry.

Look paint the stock markets a lovely shade all you want, call yourself a winner and others losers but fact is the stock market is a game. The winnings are getting bigger and the world is getting poorer.

Do dividends get payed when the markets crash?

Because demand for goods doesn't stop, just the credit to pay for it... Notice I didn't say cash?

Stock markets and egos go well together... They're both often artificially inflated. Most people don't have the air to waste on such nonsense, seemingly there'll be less and less in days to come.

We are talking about gaming now not investing, which is an important shift in paradigm.
I've been watching the "morning line" shift with the aging demographics.
If you are honest with yourself and you see that you could lose the savings that you needed to retire by gambling in stocks, then there really isn't much of a decision to make.
FDIC insured products would outpace inflation in the event of a years long economic depression.
The economic damage might bottom in the time interval of quarters rather than years, spot oil price is currently in the $20 range but August futures are in the $30's which supports the idea of increasing global productivity by later this year.
We could even see inflation which would leave an FDIC insured ladder of CD's losing money, but it probably wouldn't be a 50% plus rout like we've seen recently in some of the global markets.

A healthy ego realizes it doesn't have control of the future, so would be more prone to accept a smaller return on investment. As long as the Fed keeps inflation below 3% there really isn't much need to gamble in risk speculation.