I don't begrudge the rich, they can't spend what they make
Neither do I- rather I meant to convey the beginning of an impression that the US share market & mutual funds are a negative rather than positive sum game. Such a view is disheartening, to say the least...
and they are lending it to guys like me at a ridiculously low rate. I can get a higher return on their cash than they can!
This I wonder about. I wonder if 'private equity', or venture/vulture capital might yield higher returns than you're thinking of. Say 45% per annum?
The world is swimming in a sea of cash, haven't you noticed?
Yes, there appears to be mucho liquidity chasing returns. The basis for my assertion that there isn't enough debt, therefore global savings depressing real yields worldwide.
I'm theorizing that by default a large (and growing) portion of that liquidity targets a narrow universe of stocks/bonds. In this sense, it is the banker who intermediates funds from the savers to the small/midsized enterprises that allow for what I believe to be the bulk of growth. Without the bankers, and low yeild CD's, what channels exist between 401k/pension/insurance money and you? Hedge funds?
Also, the high savings rate in the high growth rate portions of the world suggests the amount of liquidity may continue to grow, supporting higher than normal valuations if that wealth is channeled into the existing equity stock. Now we know that some of the wealth being generated in china is likely being soaked up by real estate and industrial development in china, but some may also 'leak' into 'safe' traditional havens.
I'll take your word for it that capital availability isn't a problem for small business. I don't have a way to monitor or measure such, so I'm left to speculate...
Wall Street has a long history of killing off whole sectors by throwing money at them.
That fits slightly with the earlier idea, that WallStreet, in conjunction with MegaCorps, may actually destroy rather than create wealth. If so, then the 401k system is dysfunctional in that it channels savings into the areas of investment potential least likely to generate substantial positive returns. |
