ARE THEY SHOOTING BLANK MONIES?
December 29th 2009 02:35
Blank cartridges. Pic source: Wikipedia
It’s still the holidays right? But a market newbie like me who is still in the process of building his finances has to keep on his toes, continue to learn the ropes of investing and try to make as few mistakes as his investing fund can afford. And if we are talking about my own fund, there’re really very few mistakes that we can afford to make.
So, I read and read and read and read and… this came to mind: Is there such a thing as blank money?
Well, there’s this famous investor Mohamed El-Erian, chief executive of giant bond manager Pimco, interviewed by AP, who likened the recent stocks gains to a “sugar high” that he said is “unsustainable.” Read the story here Really Long Link
He is like many others who are saying that investors cannot expect a “V” shape economic recovery this time. They are saying that the fuel that runs the world economy so far are bail out and stimulus funds.
Now I’m out of my depths here, but somehow I do recall that economists have said time and again (not exactly the way I am saying it now) that money pumped into an economy tend to create more money that further fuels the economy.
I was probably reading it all wrong, but if the experts are saying that we are in for more hardships because the money that circulates in the system are pure bail out and stimulus funds that will soon have a waning effect on the world economy, does that mean that there is a different kind of money? Something that is sterile? Not fertile?
I need a little help here because I kinda believe that there is only one kind of money and it is the kind that multiplies, grows and create jobs when used properly.
The problem is, the more comments I read about the pump priming, bail-out and stimulus funds, the more I get the impression that there will really be a lot of hardships ahead which to my newbie eyes translates to: “more companies will go bankrupt, get out of the equities market, quick!”
Scary stuff!
Except, I’m a bit of the stubborn kind. I tend to cling to the idea that somehow, all those money that were dumped by the world governments to the world economy will find a way to breed, reproduce and inspire fertile minds to formulate ideas that could spawn productive endeavors that will eventually create jobs or maybe, just maybe, bring back some of the lost ones.
Sure, that could take a while… but there must be a reason why some of those who received bail-out funds are now raring to pay them back. I’m quite certain they are not returning that money because they suddenly found no use for it.
But I have an open mind. I’m probably too far off the mark here…
Will somebody please convince me to totally get out of the market because there’s no money to be made there, no matter how careful I become - even if I am willing to wait a while – because all that money that they are throwing into the economy are all blanks!
| 41 |
| Vote |
