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52776

Stock Market Rally

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Just wondering.... why at the markets up now? what has changed from the doom and gloom of only a few months a ago?

Are people being stupid to pour their savings back into stock? if so why so many? nobody is believing politicians,or expert independent finical advisors anymore are they?

What can people with sterling cash savings do with their money...(that already have some gold).. buy property, seems not,gilts/bonds.. no longer a low risk investment.. leave in the bank.. and wait for sterling collapse .. or bank to do same..

Any thoughts?

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I suspect that all the printed money via QE, TARP etc is finding it final resting place in share prices. However increased share prices are not justified unless those companies are making more profit. They can only do this if the consumer chooses to buy more product. Instead the stock market is being used as a savings account, a place to park funds without regard to profitability of the companies. Normally excess funds would flow into all asset classes but people are wary of further price drops in real estate.

At the macro level asset prices reflect availability of capital, savings and credit. As the unemployed and pensioners consume savings they reduce the quantity of cash available for assets leading to price falls. This is being reversed by pumping in freshly minted money. All money eventually ends up in asset prices.

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I suspect that all the printed money via QE, TARP etc is finding it final resting place in share prices.

If the Telegraph report from last Sunday is accurate, then it seems QE has gone into bank shares.

I can't find the story to link, anybody able to help out?

It was by Angela Monaghan on page two of the business section.

"Investors have been using large swathes of the 125bn so far poured into the economy by the BOE to buy shares and debt in Britain's biggest banks.

The BOE believes this is why the closely watched money supply data has so far shown little sign of improving since the QE programme began..."

The article also reports that the BOE MPC August minutes describe the money growth as "surprisingly weak"

I'd say to 52776 that is part of the reason why the markets are "surprisingly strong".

Edited by DiggerUK

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If the Telegraph report from last Sunday is accurate, then it seems QE has gone into bank shares.

I can't find the story to link, anybody able to help out?

It was by Angela Monaghan on page two of the business section.

"Investors have been using large swathes of the 125bn so far poured into the economy by the BOE to buy shares and debt in Britain's biggest banks.

The BOE believes this is why the closely watched money supply data has so far shown little sign of improving since the QE programme began..."

The article also reports that the BOE MPC August minutes describe the money growth as "surprisingly weak"

I'd say to 52776 that is part of the reason why the markets are "surprisingly strong".

Thanks for the replies... who r these investors.. the BoE just gave them billions of pounds?.. sounds like a good job?

So what can the average Joe with cash in the bank do? is the worst thing to have .. or the best?

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who r these investors..

They stumped me with that one as well.

But as all those who investigate fraud tell us, to find the perp you must "follow the money"

OK

Stage 1. Money leaves BOE.

Stage 2. BOE buys a load of toxic crap.

Stage 3. Big Banks say thank you.

Stage 4. ?

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They stumped me with that one as well.

But as all those who investigate fraud tell us, to find the perp you must "follow the money"

OK

Stage 1. Money leaves BOE.

Stage 2. BOE buys a load of toxic crap.

Stage 3. Big Banks say thank you.

Stage 4. ?

So if a ship load of Vulcans, with their logical thought process, were to be unfortunate enough to run out of gas over planet Earth..

they would have to say that the capitalist system is pretty much on its last legs... captain..

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So if a ship load of Vulcans, with their logical thought process, were to be unfortunate enough to run out of gas over planet Earth..

they would have to say that the capitalist system is pretty much on its last legs... captain..

Don't, whatever else you do, underestimate capitalism's ability to turn things round.

If you follow history from 1930 to today, you will see that the social consequences of how they deal with it, are of secondary importance.

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Don't, whatever else you do, underestimate capitalism's ability to turn things round.

If you follow history from 1930 to today, you will see that the social consequences of how they deal with it, are of secondary importance.

Very true sir.... so i guess inflation is better than a world war.. for the time being anyway..until a new saviour emerges ..

scary ....

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Very true sir.... so i guess inflation is better than a world war.. for the time being anyway..until a new saviour emerges ..

scary ....

Very scary.

Anyway your original question, what to do with your loot.

I can only tell you what we have done.

6 months readies in PB.

The rest is 6 gold, 3 NSI Index Linked, 1 ISA. (roughly rounded)

We splash out when we feel like it, buy gold when it is cheap and will keep us under an average of 540, and are going to up our cash ISA's as and when.

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Very scary.

Anyway your original question, what to do with your loot.

I can only tell you what we have done.

6 months readies in PB.

The rest is 6 gold, 3 NSI Index Linked, 1 ISA. (roughly rounded)

We splash out when we feel like it, buy gold when it is cheap and will keep us under an average of 540, and are going to up our cash ISA's as and when.

Thanks for sharing your own finical info.... so u have 60% in gold.. I guess you are very sure that gold is a good way to go.. I bought some too but around 640.. maybe not the best timing but seemed a good idea at the time.. :)

Dont think I,ll have to sell anytime soon so just have to see how that goes.Rest is just cash in savings account.. making no interest!!

Why r u going for more cash in ISA.. actually what is an ISA..

Thanks for the info

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I bought some too but around 640.. maybe not the best timing but seemed a good idea at the time.. :)

Why r u going for more cash in ISA.. actually what is an ISA..

640, a lot of people have bought when prices were up. Only once have we ever bought right at the bottom of a dip.

We are all going to test our judgement on gold over coming period.

ISA= tax free savings A/C.

There is a thread here, and one over on MSE.

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640, a lot of people have bought when prices were up. Only once have we ever bought right at the bottom of a dip.

We are all going to test our judgement on gold over coming period.

ISA= tax free savings A/C.

There is a thread here, and one over on MSE.

ok thanks.. yes Iam down at the moment.. but at least if my bank goes bust I have something!! sort of an insurance policy..

But hate to see it sink without trace ..

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