Liquidate entire portfolio until virus is over?

buglawton

Sell up everything now and buy back when the market normalises. What could possibly go wrong?

EdGasketTheSecond

I think its a fair assessment of where we are at. You can't just give away money without debasing the currency eventually leading to inflation. As for the market, with enough stimulus anything can stay up in numeric terms but in value it will still have fallen due to the effective currency devaluation from the stimulus. We either go down or we have excess stimulus and neither will be good.

worldtraveller

CLOSING NUMBERS FROM YESTERDAY:

FTSE 100 @ 5,704 - DOWN 26% FROM PEAK

FTSE 250 @ 15,569 - DOWN 30% FROM PEAK

FTSE ALL SHARE @ 3,141 - DOWN 26% FROM PEAK

DOW JONES @ 22,654 - DOWN 23% FROM PEAK

NASDAQ @ 7,887 - DOWN 20% FROM PEAK

BananaRepublic

EdGasketTheSecond said:

I think its a fair assessment of where we are at. You can't just give away money without debasing the currency eventually leading to inflation. As for the market, with enough stimulus anything can stay up in numeric terms but in value it will still have fallen due to the effective currency devaluation from the stimulus. We either go down or we have excess stimulus and neither will be good.

We did exactly that 10 years ago and it didn’t cause inflation. It did though mean that we had huge debts, which seriously impacted our wellbeing for many years after. 

kuratowski

Got that the wrong way round there, the huge debts were the reason why quantitative easing (money creation) was adopted, not the result of it.

BananaRepublic

kuratowski said:

Got that the wrong way round there, the huge debts were the reason why quantitative easing (money creation) was adopted, not the result of it.

No. The public sector (we) acquired huge debts to bail out a part of the private sector. 

kuratowski

Absolutely.  Sorry, I may have misinterpreted what you meant by "exactly that"; I thought you were responding to the money creation that Ed is harping on.

The sequence was: huge debts in private sector -> huge debts in public sector but also
huge debts in general -> loss of confidence -> reduced demand -> quantitative easing

Thrugelmir

BananaRepublic said:

kuratowski said:

Got that the wrong way round there, the huge debts were the reason why quantitative easing (money creation) was adopted, not the result of it.

No. The public sector (we) acquired huge debts to bail out a part of the private sector. 

Prior to which the private sector was funding an expansive welfare state. A house built of cards. 

JohnRo

kuratowski said:

The sequence was: huge debts in private sector -> huge debts in public sector but also
huge debts in general -> loss of confidence -> reduced demand -> quantitative easing

Debt per se wasn't the problem, QE was 'required' because the job of a central bank is to keep the banking system in clover, at everyone elses expense if need be.

The reason for QE being introduced was because some banks were offloading shadow banking sub prime debt packaged in gold leaf, it became clear what they were doing and other banks started playing the same game, pass the turd with each other, assisted by complicit ratings agencies.

The banking cesspit was exposed for what it is, trust that anything was quite what it appeared to be evaporated and the system lost confidence in itself.

QE was needed to flush the system with clean money that everyone knew was untainted by cesspit corruption.

EdGasketTheSecond

For all the buy and hold fans

Has he got a mobile phone or just an itch?