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Something I think on often: capital Is no longer scarce


I have thought about this piece on capital often since I read it: Continuations by Albert Wenger : Capital Is No Longer Scarce.

I realize it is relative and that there are people and organizations that have difficulty accessing capital. But I believe overall there is an abundance of capital. I believe that is why you see a lot of the behaviours you see in the world, from negative interest rates to bogus unicorns like We and Uber and Lyft to high housing valuations to no inflation.

 

2 responses to “Something I think on often: capital Is no longer scarce

  1. I was with you right up until the end. Shouldn’t abundant capital mean more inflation, not less?

    • smartpeopleiknow

      Yes and no. Yes in things like housing. No otherwise, because the capital is not spreading through the market. Companies aren’t paying employees more, but instead using the capital to do stock buy backs. So stocks and housing is inflating, but other goods are not because of where the capital is stuck.