Nasdaq Biggest Bubble in History

[Bratnia]

On 11/07/2020 at 23:42, Kman said:

Fed creates more dollars, gives to banks, banks buy stocks, no point buying any long bonds with low interest rates 

In 2008 the UK had around £500Bn of debt (Gilts) in issue, that were costing around 5%/year to service. The Bank of England printed enough money to buy up most of those Gilts, whilst the Treasury issued around twice as much new Gilts, paying around half the interest rate. The BoE returns all of the interest it receives on the Gilts it bought, back to the Treasury. On paper the UK debt increased three-fold, rose from £500Bn to £1.5Tn, but costs no more to service than before. Since then inflation has been around 33%, so the debt has also increased - to around £2Tn in reflection of that, and where the BoE holds around a third of that debt. In effect debt interest cost was reduced but with more debt in issue and where that debt is spread out over more years (so more time for it to be eroded by inflation). With such a big bond buyer (BoE) in the market however bond prices rose and pension funds etc. on seeing bond portfolio gains reduced bonds to add more stocks, pushing stock prices higher.

Bonds up, gold up, stocks up. Sooner or later it will be inflation up, bonds down, stocks down and gold up - assuming inflation > bond yields (negative real yields). Shortly followed by gold down, bonds up, stocks up, as initial higher inflation calms into more modest inflation and real yields turn positive. When? Dunno! Just hold stocks and gold (and maybe bonds) and enjoy the ride. Rebalancing will tend to see either more ounces being accumulated, fewer share certificates ... or vice-versa.

[KDave]

Robinhood top 5 stocks;

Apple

Tesla

Microsoft

Moderna

Amazon

Just wait until the selling starts.