I don't get how everybody is just making a killing right now. What goes up must come down? Are people going to get uber burned?
Like somebody who put in 50% of their net worth today, and maybe it drops?
Like somebody who put in 50% of their net worth today, and maybe it drops?
In a bubble (up to you to decide if this is a bubble) a lot of people end up very wealthy on paper, but they only keep what they manage to sell before the retraction. Sadly, a lot of people can't resist the urge to double down as prices get higher and higher, meaning they lose more on the way down than they thought they were risking on the way up.
> Like somebody who put in 50% of their net worth today, and maybe it drops?
YOLOing your net worth into stocks isn't something that happens in the real world very often, contrary to what you see on WSB. The only people doing that either have severe gambling problems, or small enough net worth that they feel like they don't really care if they lose it all because they can start over.
The weird thing about this bubble is everyone he gets rich on extreme gambles seems to want to post it for internet cred. Makes it look like everyone's doing it.
This is a market mania at this point. Everything thinks stimulus is all-powerful at this point, but there's a lot of FOMO going on too.
Jumping off this train in time is what takes a real skill, not jumping on it.
there is no gravity.
Maybe it pops tomorrow, maybe it goes on for years. I don't know, nobody really does.
Same thing was said in 2013 and 2017..
That's my opinion, but we'll see.
Unless governments take a hard line against bitcoin by banning it, something they mostly haven't been doing to date, I expect it will have a future as a kind of digital gold. However, gold has tens of thousands of years of history as an asset class, while bitcoin is a little less proven. Don't forget it used to be illegal to own gold in the US, so bitcoin is not as safe from government as people might think.
But all financial assets tend to follow cycles of booms and busts. So the question is, where are we in the cycle? Are we nearing the top in the near term? I think we are, the growth of bitcoin has gone nearly vertical lately.
The government can always just make a law and take whatever it wants from you (or imprison you). Doesn't matter if it's from a bank account or bitcoin cold storage on planet Musk.
It's a lot easier for the government to pilfer your bank account, than for them to torture you to hand over your seed phrase (that is if they even know your real identity). Decentralization absolutely takes power away from the state. That's not even touching the truly anonymous crypto like zCash.
Works the same as with bank accounts or scamcoins.
Are you sure? I have never in my life met anyone who thought they didn't have control over their assets or that they needed to have more control.
If an asset isn't growing faster than inflation, it's losing money. If there are other assets offering better risk/reward then money will flow to them and out of the inflated assets.
Personal savings rate is up, discretionary spending is down, people are stuck at home, and everyone is glued to their phones. I think a lot of people's extra money is going into crypto and the market. FOMO reigns supreme, at least until the numbers turn red.
It may or may not show up in consumer prices eventually.
How about the actual things you need: housing, groceries, college, gas, electricity, a vacation?
Due to the pressure on government to keep inflation low to avoid devaluing their dollar inflation is a gamed number and the goal posts have been moved to keep it low so things look good. Meanwhile the price on everything that I buy or want to buy is through the roof and I can’t find a job that will pay me more than my current one - guess I should have gone with software instead of hardware
Now, thanks to economic inequality, I think a lot of folks are feeling effective inflation, but the true value we define as 'inflation' has not risen much yet. Sure, some things are up, but they're not included in the calculation of 'inflation' so it makes sense to talk about them in different terms, I think.
Inflation as represented by CPI is only one measure of inflation. Just because the Fed uses that measure to drive policy doesn't mean there isn't inflation in other areas of the economy, like housing.
Inflation is coming, but it seems to be inflation driven by supply disruptions and not monetary policy driven inflation. I'm still not 100% on board with the idea, but I've been reading lately that QE is basically low-velocity money and doesn't necessarily contribute to inflation. I know we didn't get much inflation after QE'08 and the velocity of money has been in the toilet since then. Combined with the USD reserve currency status I think we could actually end up with deflation but IDK. Real economists can't figure it out and I'm just some idiot on the internet.