stocks and interest rates

Discussion in 'Business and Finance' started by THALLON, Sep 5, 2015.

  1. Why is the stockmarket worried by interest rates,
    the stock market is essentially gambling,
    people who have spare money and want to invest it to earn more either
    buy property,
    buy a business or expand,
    stick it in the bank,
    invest in the stock market.
    For ordinary people the bank is the safest, but if interest rates are only 1 or 2 percent your not
    getting anything,
    so like lemmings they all flood into the stockmarket and buy shares with rich dollar signs
    in their eyes in companies that will pay them a dividend, a slice of the profits, that might be 3, 4 or more percent and the share price might double or triple.
    BUT, if interest rates rise all that small fish money flows to where its safe,
    especially if you see Greece in the news won't pay its debts so half of Europe is in trouble with debt,
    or japan has troubles or China melts down, or Brazil and Canada are in recession,
    its all BAD NEWS,
    So the little guy investor paid $100 for a share and suddenly its worth 80 and being a little guy
    who is afraid he takes a loss and jumps out of stocks, and into the bank. After all the stockmarket is only a big paper Ponzi scheme, some of its activities are downright criminal
    how CEO's are paid millions and issue new shares like they were candy.
    Some mining, tech and other companies only ever have their hand out for more money, they never actually come good at make money.
    Who will buy our shares and stocks? cry the millionaire stockbrokers.
    If ordinary people, all those poor and middle class have poor wages it won't matter if they have jobs but no disposable income to waste on feeding the sharks of wall street.
    Where is the bottom of the market you ask?
    Its like a dark Wishing Well of water and your going to jump in,
    hope there is water at the bottom.
    I am FOR higher interest rates, not stupid high but higher because
    older people in retirement need an income stream from their savings and it needs to be above inflation and it needs to be stable,
    unlike the instability of the stockmarket which can wipe out savings in a day.
    Lets face it, nobody, not even stockbrokers can get picking stocks right so how does a 65 year old cleaner or labourer or others who just retired?
    Of course somebody has to pay higher interest rates and that would be land purchases, you buy a house or building and pay interest on the loan
    and part of that interest pays the banks profits and all their savings account holders.
    the alternative is to pay all retirees a pension from taxation.
    So which is it to be: higher taxes or higher interest rates.

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