Quote Originally Posted by value_investor View Post
A bit of a head scratcher here. Do they just let companies go out of business that are inevitably going to go out of business anyways? The FED says no. Its a great story of kicking the can further down the road.

The Fed are buying junk bonds, propping up these companies at the moment. A couple examples, Gamestop who reported a drop of 25% during December ended quarter. Same with Ford who are on the verge of going out, reporting a loss during the December quarter which is the strongest quarter for car markers traditionally.

If a company can't make money during the greatest bull market in history then propping them up to survive for a few more years is all the FED is doing. A lot of retail investors who are new in the game are about to get whacked I feel.
The US fed is keep the stock market up "at all costs" and they will keep printing until the virus is over. It's not an issue of valuation but rather, to maintain companies to stay operating and keep jobs going. What keeps the USD currency strong? Well, it's due to other nations are doing the exact same thing; oh not all currencies are the same meaning countries that try to print their way out of this crisis will have a worse effect on their economy than if the US did the same thing.

On the public end, the US is in an entirely different position due to their high disposable income. Meaning if a person were to start a business in the US, they would be more likely to succeed than to do the exact same business in a place say like NZ or in a bigger place like the EU. This is exactly why capital inflows continue to go into the US. If you were a bank, who would you prefer to lend to? A socialist, high taxed nation where the likelihood of the businesses to succeed is less? Or to a highly capitalistic place such as the USA where profits can still be maintained, even at the cost of the people that live there?