Quote:
Originally posted by sgtclub
I was thinking about this more in terms of individual wealth, rather than company wealth. Dumping more cash into the markets should increase stock prices, meaning that those that currently hold the stock will see their investments appreciate. Although there may be an increase in new issues resulting from the higher stock prices (i.e., cheaper capital), I don't see this as being the same model as in the 90s, where the increase in capital was spurred by demand for new issues by companies. In other words, I believe that the primary effect will be creation of individual wealth, rather than capital investment in companies, and that an increase in individual weatlh would have some benefit to the economy as a whole.
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Perhaps -- but if that wealth is cashed on any significant scale, share prices will fall. This is exactly the "run-up" scenario I was talking about. This "wealth creation" would benefit those who already have substantial investment assets, at the expense of those who depend on SS.
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