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Comment by snarf21 | Hacker News Reader

It is very simple. There are two things happening here. One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine. Two: interest rates are being held artificially low by the Fed and have been for a while. So people are desperate for returns and the only place to get it is equities.

It is a pyramid scheme and must pop someday. Really just depends on how/what/when the Fed does.

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You're correct, but I think the "mystery" here is why a basket of unprofitable companies is outperforming broader indices.

Investors are desperate for growth, and the prospect of investing in a company that could 10x in value over a very short span of time is just so tempting.

It might seem outlandish, but there are many startups that have exploded right after IPO recently, so investors are asking themselves, what's the next hot stock, and how can I spot it before its valuation explodes?

Because of perceived future value, and if you had only certain avenues to bet on , then tech would be at the top. Added to that, gamified platforms like Robinhood, where there are a whole bunch of new, inexperienced investors. Robin hood added like 3 million customers in the months after covid.

They're anticipating a greater fool comes along. Foolish retail investors invest in hype.

> One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine.

And ... the predicted response (dollar collapse) has not happened so one can make 2 arguments:

1) if the result you like is the economy working then: Well Done! If the result you want is maximizing the value of dollars then: Bad Fed! Very very bad!

2) given that this hasn't collapsed the value of the dollar, why haven't they done this earlier and given the money to our government to spend on infrastructure ? Clearly we're still in the zone where more loans make the economy go smoother.

USA is all in, expect military to prevent the pop

What will they do, put a gun to consumers’ heads to force them to buy exercise bikes and the latest iPhone models?

Close, but you're missing a step: create new money, give it to Americans so they can afford to buy exercise bikes, put a gun to the head of anyone who dares challenge the US dollar hegemony.

Didn't Germany already try this exact method and fail following their post-WWI sanctions? They had to pay back something like $132 billion gold marks London Schedule of Payments required Germany to pay ~ $132 billion gold marks and issued a bunch of currency leading to hyerinflation? And resentment, populism and nationalism rose and things went pear shaped from there.

They failed because they lost the war.

Not: put a gun to people in other countries heads to force them to sign contracts that are very favorable to the US

https://en.wikipedia.org/wiki/Gunboat_diplomacy

Relevant: Map of US Navy "deployed carrier strike groups" in conspicuous locations https://news.usni.org/category/fleet-tracker

USA will negotiate ever more blatantly slanted Trade Agreements backed by sanctions (Russia), regime destabilization (Middle East) etc

You got down-voted, but it's naive to think that's not true.

US and UK did orchestrate a coup to overthrow the democratically elected Prime Minister of Iran in 1953. (Operation Ajax)

The Prime Minister was a lawyer and politician that took control of Iran's oil resources from British Anglo-Iranian Oil Company (What we know as BP today), and he was going to take more actions to take control over their resources.

https://en.wikipedia.org/wiki/1953_Iranian_coup_d%27%C3%A9ta...

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