Quote:
Originally posted by sgtclub
Why is that the case if, as Sidd says, we will have $30 billion of new capital just from private accounts coming in each month. In other words, doesn't this create a new equalibrium, albeit, one less tied to valuation than even today?
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Because of the vast sucking sound created by the folks who sell out, taking their profits and investing in things like vacations in the Bahamas and Porsches.
Sooner or later, that sucking sound will reach a crescendo as the PRA investors realize that stock prices have stopped going up, and in fact are dropping. About that time, they will be switching their investments into the bonds that the rest of the SS funds have been invested in all along, in order to protect against further losses in their private accounts.
