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Reply to "Do you think the S&P 500 will continue trending up in a straight line? "
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[quote=Anonymous][quote=Anonymous]The market is the depository of printed money . The fed is locked into low rates until something catastrophic occurs. The whole thing is a mess . Nobody knows exactly what is going to happen but the long term is going to be really bad.[/quote] There really is no increase in actual printed money in circulation. There's just an increase in depositary credits sitting on the balance sheets of American banking institutions, as we've bought all the T-bills they'd otherwise hold. The reason stocks are up isn't because there's an increase in funds flooding into investments, it's because the market's current perception of the long-term risk free rate of return is very low and so people are willing to value stocks at a level that reflects those expectations. It will only end really badly if the Fed unleashes inflation that it can't control, which seems unlikely to me. If anything, deflation seems like a more legitimate risk IMO.[/quote]
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