Anonymous asked in Business & FinanceInvesting · 5 months ago

did Central Banks in Europe and Asia ALSO print out Trillions of their currency & it ended up in their stock markets?

if everybody does it, then it isnt that bad and wont lead to inflation, right?

3 Answers

  • cosmo
    Lv 7
    5 months ago
    Favorite Answer

    Yes, inflation is a worry.  In fact, the current values in the Stock Market and in Real Estate can be viewed as being the result of inflation.  And we are now, with the pandemic crisis, beginning to see increases in commodities.  With interest rates at zero, interest rates can't go down any more, so the only direction is up.  That pretty much kills off the fixed-income market.  The very low interest rates in recent years have resulted in a lot of loose money, mostly in the hands of the 1%.

    What can an individual investor do?  Some investments are deflationary.  TIPS, for example (google it) are now selling at negative effective interest rates.  Bitcoins are designed to be deflationary.  And of course, there is always precious metals and commodity futures.  It's hard to know what the Stock Market will do --- it may go up, but not as fast as inflation, so that your accounts are increasing in dollars while decreasing in value.  In that case you can't make money by shorting or buying "put" options.  You could make money by leveraging and buying, but that is very, very risky if it all turns bad even temporarily.

    The theory is that central banks can continue to hold interest rates at zero, and this will allow countries to print money as needed without causing inflation.  So far that's sort of working now, but when it stops working --- look out.

  • Anonymous
    5 months ago

    CASH MUST BE FAKE.........OMG!!!!!!!!!!!!!!!

  • Kieth
    Lv 7
    5 months ago

    Banks don't print money.

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