Economy Zombie companies

[ElKarlo]

Two things I can think of with the lack of inflation:
1) Obviously there's SOME of the money getting picked up as a reserve currency by other nations so there's that, but

2) Inflation isn't being seen in the items covered by either the CPI or PCE, but is occurring in other realms (asset bubbles). What is a bit of concern to me is that more and more companies are remaning "private" vs. going public. That is to say, companies that have accumulated alot of money during this pandemic now have the power to acquire and provide rounds of funding to companies vs. the companies having an IPO. The downside to this is, naturally, that most retail and middle-class level investors with have less and less access to investment opportunities. While there's still plenty of opportunity to invest for lower and middle-class peoples without barriers to entry these days, I'm curious to see how this plays out down the road with more and more companies either staying private or getting acquired by behemoth companies whose share price could become a barrier to entry.

Good post

Yes reserve holdings is part of it. But it definitely doesn’t explain all of it
As you said asset bubbles are probably where it’s gone. Housing and apartments are definitely seeing price increases.
I think we work was the canary in the coal mine. It was heavily overvalued and all that venture capital was desperate to find growth. Which led to the we work disaster

The lack of IPOs is concerning to me. As it will stifle innovation. You do t need to actually make it big. Just get VC money or get bought out. You never have to convince the public that it’s a good idea I am not smart enough to explain this well but I think there is something wrong when Microsoft, Apple, Cisco and company are simply buying up all the start ups. Seems very late Roman republic to me. Where the marvel land owners have a massive competitive advantage that eventually became insurmountable

 

[ElKarlo]

You can find a pdf of the book but rich people don't buy goods. They buy things like real estate and stocks. Just like U.S. now, pre-ww1 Germany was doing great and the stock market was soaring. Inflation tends to pump up the markets but it according to the book sets up a problem that can only be resolved through the economy growing and matching the money supply or deflation, which penalizes anyone that owes money.

Who is the author?
Yes QE is already punishing anyone that saves money. Same with nine holders. They are losing to inflation in everything that isn’t risky
I bought by first bonds to help with the credit markets back last March. Other than that I don’t see the reason to own them. I’m basically all stock. Which is nuts. The stool only has one leg now. When it used to have three

 

[Finding Deebo]

I am not smart enough to explain this well but I think there is something wrong when Microsoft, Apple, Cisco and company are simply buying up all the start ups.

This is a good point. Due to their heavyweight, they can pick up on companies that may be losers just to prevent the potential for others getting in on a winner. The public never gets a shot. Reminds me of playing poker when one guy has a huge pile of chips and can bully the other players a bit. When he can put you all in on every hand, it's a huge source of leverage regardless of his ability as a poker player.

 

[ElKarlo]

This is a good point. Due to their heavyweight, they can pick up on companies that may be losers just to prevent the potential for others getting in on a winner. The public never gets a shot. Reminds me of playing poker when one guy has a huge pile of chips and can bully the other players a bit. When he can put you all in on every hand, it's a huge source of leverage regardless of his ability as a poker player.

Good example. But also like Son of SoftBank has done, if you don’t take my money, I’ll find your competitors. How can you say no? Which is how we work and those dog walking apps got crazy valuations. I believe QE coupled with middle eastern money with nothing to invest in domestically has perverted the market

 

[Finding Deebo]

Good example. But also like Son of SoftBank has done, if you don’t take my money, I’ll find your competitors. How can you say no? Which is how we work and those dog walking apps got crazy valuations. I believe QE coupled with middle eastern money with nothing to invest in domestically has perverted the market

Didn't know that about Softbank and WeWork. Good info.

 

[ElKarlo]

Didn't know that about Softbank and WeWork. Good info.

Yeah check out Son and his vision fund. Guy bullied Uber into letting him invest in them. Otherwise he’d give Lyft billions. Dude rolled around doing that. And his money was mostly gulf state money.