$1T flowed into stocks in 2021, greater than last 20 years combined

An IPO is a public exit for the early investors.

That’s true, in the sense that there are never more total jobs than there are qualified workers, although there can be less. Once full employment is reached any job creation is a zero sum game.

The financial derivatives markets do dwarf the stock and commodities markets.

It's a good question, but we must consider downstream effects. When one buys SP500, it pushes up the price in price/earnings for those companies, making them slightly less attractive investments and therefore other small companies slightly better investments. When, residually, some of that money flows to increasing the price of a struggling $1b company (efficient market hypothesis), they're now able to be capitalized better in investing in a second factory, or affording their debt as to not go bankrupt and have further knock-on economic effects.

High stock prices aren't considered inflation by economists, they're considered asset bubbles.

They're not wrong, they're just speaking a different language than you are and don't agree with the definition of inflation.

This is because asset bubbles tend to pop over the long term and come back down to ground.

There's the idea of Cantillon effects where there's inflation in the kinds of things that rich people spend their money on. But that theory has attached to it the notion that inflation necessarily trickles down from there as the wealth trickles out, and economists will object to that because like the quote says it just hasn't been observed to happen (consistent with the fact that the rich keep getting richer and the poor keep getting poorer in this economy, and we're doing the opposite of "raising all boats").

> Clearly that didn’t happen.

In the basket of goods that statistics use to "prove" there is no inflation.

Based on this same logic I could see someone saying, in 2005, “despite loosening lending requirements back in the late 1990’s, we had these same concerns of instability in mortgages that would result in a housing collapse. Clearly that didn’t happen.”

I personally cashed in >$1m in CD's and bought stocks because of my fear of being left behind because of inflation. Many of my CD's were callable, so I really had no choice.

> Can you buy stocks with central bank reserves?

That kind of depends on who you are. If you are a central bank, and particularly one of the central banks that doesn't, by policy, not buy that class of securities, yes, you can (e.g., the Bank of Japan does.) If you are not a central bank, you can't buy anything with central bank reserves, and if you are, say, the Fed, you could, but you've made a policy choice not to.

Nobody gets money "out of the market". They sell to someone else, and use the proceeds of the sale to buy another asset. But the original buyer could also have used the proceeds too buy another asset in the first place. No money is created or destroyed in this transaction.

In fact these transactions have little to do with the real economy at all, they are merely pricing assets. You can buy and sell something 100 times or 10,000 times and none of that will have any bearing on the real economy or even on things like inflation.

This is true, but that is not what this article is about, because in terms of net issuance, the stock market has been negative for some time, with buybacks outpacing new issues.

Right, every _share_ purchased is also a share sold (in principle), but that price will not usually be the same price that the current seller originally purchased the share at themselves. As a result, you can have inflow/outflows in dollar amounts. For individuals stocks, with increasing/decreasing market caps, but of course there can be more money in the market overall.

That is incorrect.

For every buyer, there is a seller. If you bought for $1, then other market participants sold for $1. If you sold for $100, then other market participants bought for $100. If money in your account went up, then money in other market participants accounts went down. The money went through the market - it didn't come "from" the market.

*obviously the story gets more complicated with dividends, shorting, share issuance, buybacks, etc. but the principle remains the same

Very often you cannot reason about the aggregate the same way you reason about an individual. The aggregate can never have more or less market exposure than average, even though individuals like you or me can.

Which implies retail investors are valuing the shares higher than institutions. What could go wrong? I'll answer that, poverty for millions of people who don't know how to diversify their investments.

My opinion is the FEDs actions, while apparently well-intentioned, will backfire spectacularly at some impossible-to-determine point in the future because MMT only works right up until a feedback loop forms between between people and the central bank which destroys the intended effects of the policies. You can see it now if you look. People are shoving everything into risky assets because they are betting on the FED not allowing their investments to tank.. because The FED has stated they think boom and bust cycles can be prevented and are a thing of the past

With so much froth to ride and so much inflation biting at your heels, you chase returns. No surprise here.

Why wouldn't the super rich be hit the hardest, aren't the majority of there wealth in stocks? Aren't middle class people more likely to keep there wealth in cash(a larger percentage at least), wouldn't they be the winners here?