I get it, many people are scratching their heads over why the stock market keeps going up, including professionals. They point to the terrible economic numbers and worsening social situation. But they are missing the point.
The stock market is going up because the value of the US currency, relative to productive assets, is going down. When the Fed prints trillions, and the amount of assets stays the same or declines at a rate lower than the increase in currency, this inflate asset prices. It's not captured in inflation numbers because of the way CPI is calculated and because of how these new supply of currency is distributed. We saw this after the financial crisis -- not much inflation in consumer goods, but massive inflation in housing and the stock market.
The stock market will continue to go up as long as the Fed continues to increase the supply of currency faster than the decline in earnings.
Also look at gold, for example GLD. It's going up. All limited assets are going up because the USD is losing value. Since the USD is a key reserve currency with ~ 2/3 share, a lot of foreigners are subsidizing US asset owners. I learned this from Ray Dalio.
Also, I don't like gold. Why? Because its value as a currency & store of value has greatly been reduced by innovation in financial technology. What are you going to do, pay with gold? I don't think so. It is my view that equities of top tier companies, given it's liquidity and scarcity, is a better store of value and a better currency than gold.
Again, the world isn't crazy, most people just don't understand that currencies are being devalued relative to securities.
Riots good for the market. One, it limits the US government's ability to escalate geopolitical issues, which means less screwing around with the supply chain, which is good for large cap stocks, which drives the indices that we call "the market". Two, unrest will incentivize the government to stimulate on the monetary and fiscal front.
Attached: braaaaaap.jpg (540x720, 72.68K)
