The most dangerous time since the Civil War

[David Horn]

(01-18-2018, 10:51 AM)Kinser79 Wrote:

(01-16-2018, 04:47 PM)David Horn Wrote: The stock market has almost nothing to do with capital formation,

Mr. Horn do you not realize that you have essentially just proved to me that you are economically illiterate?  Corporations sell stock for the express purpose of raising capital to use it for whatever they want to use that capital for.  Why investors buy stock from this or that corporation is pretty much irrelevant.  

While the vast majority of businesses in the US are not corporations listed on the NYSE, to say that the stock market is not a means for those corporations that are to raise capital.  Indeed that is the raison d'etre of stock markets in general.

Further, considering that a large proportion of businesses  in the US are not corporations at all, inflation limits the ability of those businesses to acquire capital.  Why is that?  Because there is great difficulty to to acquire capital faster than the corrosion of value of the currency through inflation

With the exception of new stock offerings, of which there are very few, stock markets trade old shares for new money.  The capitalization of those old shares occurred in the past -- often in the distant past.  To be honest, the opposite is happening right now.  Old shares are being purchased by the corporate treasuries that issued them and are "banked" by those corporations to prop-up the price of the remaining shares.  That could be called capital retirement.