I know nothing about finance but the Federal Reserve has provided new money at almost no interest to banks for a fairly long period of time from ~2008 onwards (this was called quantitative easing). This essentially forced the EU and countries like Switzerland to do the same, if they did not want their currency to get too strong. It is not a stretch of imagination that this fueled much of the current stock market boom, both Euro and Dollar have lost a lot of value at roughly the same pace.
Yeah, the fed loans money to banks at, essentially, zero interest, and the banks then use it to invest in the stock market, or some such. They make money, because the market isat all-time highs. They pay back the fed, and keep their profits.
All the major firms do this. It's nuts, but our government literally lends free money to investors on Wall Street so they can make millions of dollars on trades.
Of course, this all comes tumbling down when the markets are in bad shape. And, unlike most people in this thread, I fully expect any and all bubbles to burst due to some outside influence: Ebola, 9/11, war, etc. Something big happens to scare the markets, and the big party here in the Valley is over. Who know when that will happen, but it feels like the next year or so will be the time frame, if my gut is any indication.
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I know nothing about finance but the Federal Reserve has provided new money at almost no interest to banks for a fairly long period of time from ~2008 onwards (this was called quantitative easing). This essentially forced the EU and countries like Switzerland to do the same, if they did not want their currency to get too strong. It is not a stretch of imagination that this fueled much of the current stock market boom, both Euro and Dollar have lost a lot of value at roughly the same pace.
Yeah, the fed loans money to banks at, essentially, zero interest, and the banks then use it to invest in the stock market, or some such. They make money, because the market isat all-time highs. They pay back the fed, and keep their profits.
All the major firms do this. It's nuts, but our government literally lends free money to investors on Wall Street so they can make millions of dollars on trades.
Of course, this all comes tumbling down when the markets are in bad shape. And, unlike most people in this thread, I fully expect any and all bubbles to burst due to some outside influence: Ebola, 9/11, war, etc. Something big happens to scare the markets, and the big party here in the Valley is over. Who know when that will happen, but it feels like the next year or so will be the time frame, if my gut is any indication.
Burn that capital while you can, folks!