I posted this in another thread earlier today: Why not? Just do some simple math: 1. Total US GDP ~$20 T; 2. 25% reduction due to worst case 25% unemployment costs ~$5 T; 3. Total USG bailout: At least $5 T and counting; 4. On top of that, FED QE like there is no tomorrow; 5. On top of that, zero federal fund rate; 6. On top of that a hidden tax cut for corporations (you need to be a tax accountant reading the fine print to find it). 7. Where can all the money go? 8. This is a presidential election year! That is why I kept buying all through March and April as soon as the magnitude of the first bailout was discussed.
I've always been amazed about those of us who insist on arguing with the market. It beat me into submission long ago. If it wants to go up I get long.
Don't get me wrong-- I do not argue with the market-- my 401 is LOVING IT--- I simply am a true believer in the laws of physics --i.e: gravity.....if this is due to the Fed-- then I am afraid the long term damage could be irreversible...
If the US Treasury yielded six percent you'd have a point. But you are ignoring the requisite need for institutions to find yield.
As long as people accept the US dollar, they can keep the presses going. This may or may not be an issue in our lifetimes. Just kick the can down the road.
I am an Engineer by training and I love me some Newtonian physics. But COVID is not the 2008 crisis structurally. And most economists I've read are convinced that the Fed actually made money on TARP and the various QE iterations over the years. And as a side note, you could argue on the merits of elasticity the other way - that is, pandemics are temporary in nature as compared to the 5,000 largest Companies in the US reporting consistent negative or underperforming earnings over a protracted period of time.