This money will keep coming in, propel the markets higher and then I will be even happier.
Not if this money goes to "money heaven".
For example, when MicroTragedy warned it was halved with no one having a chance to get out and $10 BILLION in wealth disappeared.
Ultimately, when a company warns, it's stock goes down and money goes to money heaven. It doesn't matter how much cash is being dumped into mufu's, etc.
Earnings drive stock prices. Earnings are driven by consumer spending. If consumer spending slows, stock prices go down and wealth is lost.
The trick is getting consumers to spend, which I don't think is possible.
My parents are a good example. A few years ago they pulled out $50K to buy a few toys for the lake home, a boat, jet skies, etc. Now they are cutting back because their retirement saving have gone down, but they are still dumping just as much in the market. According to them, many of their friends are doing the same. This WILL have an effect on earnings if enough people are doing the same, and I believe they are.
chic |
