The OverInflated Stock Markets!

Date: 6th Sep 2018

If a business is doing well, it’s natural for us to want to invest in it, even if the company isn’t in our City, State or Country. Almost all countries have their own stock markets today. People from world over are able to invest into foreign markets through FDI. Stock markets consist of various a variety of products and services. Looking at the trend over the past 10 years we’ll attempt to gain some knowledge.

Great Recession in 2008 caused a lot of damage to financial sectors across the globe, which is why it’s important that we be more careful this time. Economic stimulus including Quantitative-Easing and Near-Zero (or Low) Interest rates were used to stabilize and boost the economy. But, this also turned out to be a moral hazard as they were incentivizing bad behavior.

It’s very important that we understand how easy it is to manipulate markets and to create market speculation. It’s very difficult to identify and differentiate between an honest investor from a crooked investor. Even with all the necessary rules in place, it’ll be too late and the damage would’ve already be done before the crook is caught.

A Massive Correction is Imminent

Current stock market situation has gotten even worse. Companies no longer need to try to boost their stock prices, that are already overinflated. In order to be prepared for the imminent market correction (read as: impending market crash) companies rather than expanding business operations and increasing hiring, they are doing stock buybacks. Which again is further inflating the stock prices to dangerous levels.

The video is added below.