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/biz/ - Business & Finance

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55866024 No.55866024 [Reply] [Original]

Can someone tell me how we are in an everything bubble if the money supply has increased by a huge amount? How can asset prices collapse if we still have a shitload of money flowing through the system? It's not like there's a mechanism to destroy this money right? Why would house and stock prices drop by 50% if there's a huge amount of money that's just waiting to slurp any dips?

>> No.55866042

>>55866024
that chart makes no sense, sociology tard should go back to high school

>> No.55866051

That chart looks so familiar

>> No.55866069

>>55866024
Isn’t there 2 trillion in reverse repo?

>> No.55866083

Even normalizing by CPI (plus all the shit they threw out of CPI), everything is overvalued. Biden's economic policy is
>print to hide the pain
And it's working because of people like you who don't understand the subtlety.

>> No.55866101
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55866101

captcha

xxx4j

>> No.55866104

>>55866024
Because the companies themselves are worth nowhere near the marketcap of the stocks in terms of revenue or book value. Why would you pay $180 for shares of Apple that will never pay off with dividends or liquidating the company?

The same is true with real estate. A 2000 square foot house is worth nowhere near $800k or whatever crazy amount in absolute terms, but people bite the bullet and put all of their income into their mortgages because they think the situation will improve and the house will be worth even more in the future.

People buy these equities for the sole reason that they are expected to continue to go up in price, not because the value is actually there. It's a game of hot potato. That's called a bubble.

>> No.55866122
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55866122

>>55866024
I see him...

>> No.55866153

>>55866104
the "value" of these equities are whatever someone is willing to pay for them, and the "value" of your money is whatever someone is willing to sell for it
> A 2000 square foot house is worth nowhere near $800k
and what is it worth? cause remember those 800k were created from thin air, while the house is taking up space, materials and labor to be built

>> No.55866206

>>55866153
Bitcoin solves this

>> No.55866222

WTF,I SEE NIKOCADO

>> No.55866287

>>55866104
No because nothing has intrinsic value, value is determined by the market. If there is demand to buy houses for 800k+interest it doesn't mean houses are overvalued it just means there is an expectation that land will have more market value in the future which is fair. There will be a massive economic divide between landowners and renters in the coming decades.

>> No.55867395

>>55866287
When you buy a stock you are literally buying a piece of a company that operates to make a profit. If the stock price doesn't reflect how much that company is actually worth then it's overvalued. If the price of a home is way out of line with how much people in the area actually make, then it's overvalued.

I know you want to sound smart with these hot takes, but don't forget the basics. Learn some real economics before you adopt edgy libertarian views about these things.

>> No.55868173
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55868173

>>55866051
>>55866122

>> No.55868176
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55868176

>>55866104
>A 2000 square foot house is worth nowhere near $800k

Tell us what you think housing in the most desirable 2% of the country should be worth.

>> No.55868207

>>55866024
>everything bubble
silver is cheap