Several people in this thread are commenting that "well of course staying in the market is the smart thing to do since stable savings instruments don't pay for shit!"
Yeah, and that's the problem. In just thirty short years, we've gone from pension plans and savings rates that might actually leave you with more purchasing power than you started (when considering inflation) to...better gamble it all in the stonkz. So much money has been put into stock market-based retirement funds (401k, IRA, 403b, and so on) that the stock market, which used to be for large institutions doing large institution things, cannot fail because it will sink everyone with it.
And yet, the stock market has become so detached from the economy at large precisely because of that yawning gap getting even larger. For those of us who can stay home yet still earn our massive salaries of which we are now spending a fraction, we have huge stacks of cash just looking for somewhere to sit. For the first time in a decade, the average American's savings rate has increased, because consumerism ground to a halt.
Yet for those who lost their jobs--because that consumerism failed--or who go out and risk infection because that's the only way to draw a paycheck, they are even more screwed. We've left our society with no stable way to save and no mechanism to provide for ourselves except ever-increasing spending relying on the wages and efforts of an ever-gigified economy.
That sucks.
Pensions and savings rates were always a gamble. These just provide an obfuscated the risk. Countless cities and companies are overburdened with pension obligations. Moreover, your retirement is always going to depend on the strength of the economy at the point time, so you might as well invest in broad indices.
That's basically what happens when you do supply side economics. It's a tool to increase deflation by giving companies money and thus invest into expanding their production capacity to the maximum. But companies aren't stupid. They know when they produced exactly as much as they can sell so they don't borrow more money than they really need. The end result is that prices don't change or they drop very slowly because the supply of goods is always high enough. The end result is slow and creeping deflation that is difficult to see. Once companies are well capitalized the excess money is then spent on random crap like stocks or housing without providing any additional value and it massively increases inequality because most people don't own any assets. A lot of basically dead zombie companies can easily coast on the value of their stock without doing anything productive.
Inflation is good for workers because it makes business owners sweat. When demand for consumer goods grows beyond supply the price of consumer goods increases and that increases the profit margin for productive businesses who then start doing economically valuable work by employing people. Unemployment keeps dropping until companies have to compete for workers by offering higher salaries. Interest rates catch up with inflation and make it harder and harder to capitalize your business, meaning only the most productive companies with the most productive investments actually get to borrow money instead of throwing it into random nonsense like stocks because they ran out of ideas.
This is what is so wrong with the system. When it fails to work for so many people (last 12 months the worst year for the average person for decades), but the wealthy are making record profits, a correction is long overdue. Whether that’s a correction with Guiletines or fascism or just a stock market crash doesn’t matter.
When you have 200m you’re sitting pretty. When 200m have nothing you’re screwed.
I’m glad you recognise it, most on HN are immensely wealthy high income champagne guzzlers first up against the wall when the revolution comes.
I do think You are right about the unfairness and expect the Occupy Wall Street and BLM protests will seem quaint if things keep going the way they are. I don't want to get political but am scared of what is comming now that everyone isn't distracted by the Orange man and are seeing how much wealth is being stolen from the masses.
The problem is the coming crash will knock shares back down to 2017 levels, the biggest gamblers will be bailed out again, and media attempting to blame it on u/Diamond_6969 will either work (leading to backlash against technology) or fail (leading to backlash against big finance)
Unless the average person with no investments is bailed out it would be pretty. 2008 is till fresh in people’s minds.
Wiping out student debt might help, but I think at this stage people want to see the wealthy suffer, and don’t care if it causes pain for normal people either. It’s the situation that leads to revolutions - if you have nothing to lose, why not risk it all to force some empathy.
I fear too little too late now.
I can’t find anything on wsb about silver, and the billboards are all about GME
Now sure silver may well be a better bet, GME is massively overvalued, silver may be a good bet, but “Reddit” isn’t talking about anything other than GME and maybe AMC, so where do these headlines come from?
https://www.bbc.co.uk/news/business-55882758
https://www.ft.com/content/d46e8623-09af-4a1f-b7e5-207616388...
The bbc seem to be quoting this post fro 3 days ago
https://www.reddit.com/r/wallstreetbets/comments/l71rdv/silv...
I bought my silver last spring (very little, just enough to buy a ride or bribe me and mine through a check point if TEOTWAWKI actually comes to be)
Edit
It doesn't really matter why it's happening, it's happening and it just broke 30 so I'm guessing were in for a show.
I will predict though that if the US retailers selling physical bars and coins come into work this morning in about 3 hours and try to replenish their stocks that they sold online over this weekend they will drive prices past the $30 mental barrier and then the sky's the limit for how high it could be pumped. Then it will be all over the news just like GME.
Redit might not even be the cause, it could be Bidens plan to increase solar production, the Myanmar coup or a plethora of other things going on.
I don't think the gamestop story is over and just because these hedge funds are showing a loss right now, they still have the opportunity to milk that stock all the way down to zero, and they will.
What is really unfair (but good for me) is from my investments and house value increase, I have made more in one year doing nothing than I did the 1st 15 years of my post school employment.
I don't know how a young person can make it in these late stages of capatlism let alone support a family, maybe that's why there are so many riots.