Could this be the reason for strong market today?
Started by
pdx5
, Oct 12 2020 04:18 PM
3 replies to this topic
#1
pdx5
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I want return OF my money more than return ON my money
Posted 12 October 2020 - 04:18 PM
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#2
dwnowhere1
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Posted 12 October 2020 - 05:25 PM
Who knows. But saw something where the UK Central Bank said going to negative interest rates is OK.
#3
pdx5
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I want return OF my money more than return ON my money
Posted 12 October 2020 - 06:21 PM
Who knows. But saw something where the UK Central Bank said going to negative interest rates is OK.
Negative interest rates can not have positive effect on capital formation.
No increase in capital, no economic expansion.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#4
dwnowhere1
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Posted 12 October 2020 - 08:31 PM
I'm looking at it in a different context.
Is it better to lose money in the bank (negative rates), keep it under the mattress (zero rate) or Take a Chance in the Markets?
Hence money flow into markets looking for a better return.
Negative interest rates can not have positive effect on capital formation.
No increase in capital, no economic expansion.
IMHO this has nothing to do with the markets.
The markets (other than IPO's or sale of Treasury stock) are just an exchange of capital between parties at some higher or lower value.
The underlying asset (if there is one -- e.g. stock or bonds) book value is uneffected.
One may feel richer or poorer depending on the exchange price (wealth or negative wealth effect similar to inflation), but the effect on the economy IMHO is nil.
Edited by dwnowhere1, 12 October 2020 - 08:38 PM.
