Let’s start with the reasons why printing is 3 trillion. US dollars did not give rise to inflation. The fact is that this money absorbed the securities market.
Given the dark past of our country in the 90s, we are used to the fact that the inclusion of a printing press gives almost instant inflation. This was due to the fact that people had nowhere to invest. All of them immediately went to the real market, where they exchanged for goods. There was no financial market in Russia in the early 90s. And the citizens who lived their whole lives under the Soviet regime did not understand at all what private investment was.
But the world is changing, and the United States has nothing to do with Russia in the early 90s. The United States has the largest financial market, which for 11 years has absorbed almost everything that the Fed prints.
The American stock market has been growing for the past 10 years, right up to March 2020. For many people, these 10 years after the 2008 crisis were their whole conscious life. Over the past 10 years, it seems that the market is always growing (a classic feeling inside the bubble), and it’s enough to buy stocks at any time to skim the cream further.
In addition, the majority saw a clear connection between market growth and an increase in the amount of money from the Fed. The result was a simple formula: if the Fed prints money, then you need to buy stocks and get rich. Everything else does not matter.
Therefore, many were waiting for the right moment (market fall) to buy shares. This fall has occurred. The Fed promised an unrestrained print of money, so physicists rushed to buy cheaper stocks. The last week, a lot of statistics are published that most of the fall was bought by physicists, and not by large players. Large players (funds) returned to stocks after the market began to grow and they realized that the most ambitious market growth in history passed them.
The most interesting thing is that even the helicopter money that Trump handed out to the population was also sent to the stock market, and not to the real economy. Spending money on something other than food and utilities in the last 3 months was not possible, so people decided so far to earn extra money on the growth of the stock market.
The general euphoria of physicists also contributed to media noise around market growth. From each iron they began to talk about an incredible rebound, and how to earn 20-30% per day on certain promotions. It always drives ordinary people crazy.
And then all the Central Banks of the world lowered the rate and killed the yield on ordinary deposits. People are afraid to invest in real estate (remembering the lessons of 2008), so for many the only stock market became the only option for saving the profitability of their savings.
Thus, immediately a bunch of factors sent most of the free money in the economy to the stock market.
And at the same time, another interesting factor emerged: in the first place, shares of well-known technology companies (Amazon, Facebook, Apple, Microsoft and so on) rose. Moreover, many companies whose financial performance during the epidemic were quite acceptable, practically did not produce growth.
The fact is that physicists do not have time to figure out which companies are financially good and which are bad. They simply opened an account on the exchange through a mobile application and bought those brands that are well known. Companies from Silicon Valley have shown excellent growth over the past 20 years, which means they are worth buying.
As a result, the more famous and hype the company was among the general population, the more its shares grew. Without any attachment to the real state of affairs in her business.
Therefore, Tesla shares gave almost 300% yield for 3 months. That is 100% yield per month. And the shares each time received another push up when the media mentioned the Mask. For example, the successful launch of the Space X rocket with a man on board gave another jump in the price of Tesla, which has nothing to do with space.