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An Antidote to Corporate Media
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FNWGMOBDVZXDNW
2016 Nov 12, 7:20am
FNWGMOBDVZXDNW
2016 Nov 12, 7:20am
In a way, high stock prices are inflation. As wealthy people accumulate more wealth, they don't buy more food. They buy more stocks. The top 1%, 5%, and 10% just got a promise of tremendous tax cuts. That money is going somewhere, and for the most part it's either into stocks or real estate. That is why I think stocks might go up a lot as people anticipate this. That's true even if people sense that the risk of collapse is higher. No one wants to miss out on returns while waiting for a collapse.
I argue that inflation is nowhere near under control, nor at the levels government statistics would have us believe. Stock prices for Silicon Valley dream merchants in biotech, bandwidth management, cloud computing, and artificial intelligence are just one categorical example of unjustifiably high stock valuations.
Yes, I realize stocks have supposedly been a hedge against inflation for decades. In fact, that is my point.
Today's investor thinks of himself as a savvy financial visionary with up to 30 whole years of proven equity gains as proof of his genius.
The mindless money printing we have been doing for those 30 years has not manifested itself in the consumer price index. Rather, it has reared its fuggly head in a runaway, self-fulfilling stock market - among other places.
None of the new tech/real world crossover companies have the proven track record necessary to justify faith in a visionary future of self-driving semi's and delivery drones replacing the entire high school graduate trucking industry for instance. And yet, even fleeting BS propaganda flinging along those lines causes ripples to the upside across those stocks on a month-to-month basis. They keep going up because they keep going up because they have to keep going up.
Behold the inflation monster. It sneaked up on us dressed as shiny new techquities, million dollar shacks, data redistribution schemes, and online frozen lobster tail drone delivery dreams...rather than the prices of eggs and milk.
You wouldn't buy a flying car I want to sell you, but you would buy stock in a company that showcases technologies that could lead to producing flying cars in 15 years - no matter how unlikely. Because stocks keep going up because they keep going up. Unfortunately"going up" in terms of stock valuations is not the same as "flying".
Thirty years of experience tells you nothing - neither does having access to 40 years of cherry-picked graphs, let alone six whole months of drone grocery deliveries.
The big Trump vote in the solid blue democrat rust belt states is one sign that investors may have miscalculated. Those democrats elected Mr. Trump. They are not racists. They voted for Obama last election.
They are angry because (in the case of this little soliloquy) a truck driving job is the best pay in the nation that does not require a college degree. Now there is some artificial intelligence to have faith in.
#inflation