How rising interest rates can impact the stock market

Started by OZER, Feb 07, 2022, 10:32 PM

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The answer is YES. The United States once set double digit interest rates and inflation dropped. It also caused recession.

That marks the second korean entry to the cold fusion. Arrogant dork had it coming

Get rid of the fed go back on the gold standard stop endless bills and spending, dump the tax code and re write the entire thing so Amazon, Google and the like pay taxes on actual earnings not something made up. Most people pay more taxes by % of what they make then these big companies. Entire system is built to help the 1%.

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The world has greater peril from those who tolerate evil, like the DOJ, than from Trump and his fellow insurrectionist!  DOJ Garland is ending democracy by not prosecuting Trumpist.

For 585 LUNA I have received 0,003 LUNA 2.0.  Amazing!!!  I am soo happy.  I hope less people to spend money in crypto and all of them to go down as LUNA. This was the best scam ever. GG Do Kwon.

They're talking about run-of-the-mill inflation driven by wage-price spirals, and saying that's how you get an inflationary spiral. In my mind, that's not the only way. We have a fiat currency and it's value is really derived from people's faith in it's value. You can print money and encourage borrowing etc, but much like stock market bubbles, there is a tipping point in there when all the feedbacks turn from negative to positive.  Normally, you hold money, it holds it's value, there's no real push to gain or spend it. If you think inflation is going to increase, it now becomes a hot potato that you want to spend as soon as you get it. You do this by buying useful assets like houses, land, food, things you need. When everyone does this it drives up the price, which would normally dampen demand, but if the expectation that money will continue losing value and the price will only increase, then the price doesn't matter anymore. Sellers can ask arbitrarily high prices. But who's going to sell into this and accept that money? Thus supply goes down at the same time demand goes up, further exacerbating the situation.  The government has been pumping new money into the economy to try and stimulate it, yet velocity stays low. Who needs to spend all that money under normal circumstances? But what happens when it all starts losing value? All that "cold" money suddenly turns hot, and the *effective* money supply suddenly increases. Meanwhile, everyone is also incentivized to borrow as much as possible to "short" the currency, further increasing the supply. But who wants to lend into this? The credit market slows, and the government steps in as "lender of last resort" again....using printed money.  Meanwhile, the massive amounts of money tied up in the stock market suddenly need a new home. I mean, who wants to hold a stock when all you can get out of it is increasingly worthless money. You paper gains are impressive, but it's only a reflection of the fact your asset is losing value, because the only value it has is denominated in dollars (rather than any kind of tangible use).  I mean it goes on and on. Wage-price spirals may be a part of 'normal' inflation but they don't really play into hyperinflation.


Im sorry but Im happy I work in Germany because the US dollar is dying

The higher the Gini coefficient the worse the impact of inflation. Rich people aren't really going to spend extra on essentials but they will do it for things that make more money which are things that they can control supply.

Ok yeah, that other bubble is the USD. Thanks for playing and good luck!

"autos selling to rental companies are low margin sales" this doesn't apply to Hertz and Tesla. They're buying at full price.

What is looking down at over and over again.