Why do asset prices keep going up?
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Promos
Global stock markets are at all time highs. Gold has doubled and silver tripled in the last two years alone. What's behind these moves? Shouldn't economic crises like Iran be pushing asset prices down? Is now a good time to invest? ––––––– 00:00 Intro 01:34 Global asset prices 03:45 How 2008 crisis pushed prices up 09:00 Do interest rates matter? 10:24 What COVID did 13:00 WHY asset prices go up. 18:27 Crises push up asset prices 20:18 How should YOU react? 23:07 A crisis of distribution 27:49 Will asset prices KEEP going up? ––––––––––– JOIN OUR PATREON – patreon.com GET MERCH – shop.garyseconomics.org DONATE – buy.stripe.com JOIN GARY'S MAILING LIST – subscribepage.io GET THE TRADING GAME – penguin.co.uk ––––––––––– Follow Gary on other channels: LINKEDIN – linkedin.com SPOTIFY – open.spotify.com INSTAGRAM – @garyseconomics TIKTOK – @garyseconomics BLUESKY – bsky.app X – twitter.com FACEBOOK – @garyseconomics DISCORD – discord.gg WEBSITE – garyseconomics.org
Paragraph 1: The video opens by highlighting a striking paradox in the global economy, noting that stock markets around the world have reached historic highs even as geopolitical tensions and economic crises loom large. The presenter points to data showing the US and Japanese markets at all-time highs, with substantial gains in Europe and other regions, and he calls attention to the dramatic moves in gold and silver over the past two years. He frames the central question as a tension between intuitive expectations and observed reality, asking why asset prices rise when one might expect them to fall during crises such as wars, pandemics, or debt crises. The discussion then situates these price movements within a long history, referencing the 2008 Lehman shock, the 2011 European debt crisis, and COVID as moments where asset prices nonetheless climbed, while living standards often stagnated or worsened. He emphasizes the need to rethink the linkage between economic health and asset values, because the standard narrative does not always explain the observed dynamics. The goal of the video is declared: to explain what is really driving asset prices up and to move beyond simplistic links between strong economies and rising markets.
Topics · economy · finance · education · public policy
Questions answered
- Why do asset prices rise during economic crises according to this analysis?
- Asset prices rise because large deficits during crises lead to the rich accumulating cash and then buying assets, while monetary policy keeps incentives to hold real assets high even when traditional savings returns fall.
- What role do interest rates play in asset pricing after crises?
- Lower and especially sharply reduced interest rates increase the relative appeal of assets with real returns, such as real estate or profitable companies, pushing asset prices higher even if the broader economy weakens.
- What is proposed as a solution to rising inequality and expensive assets?
- A more progressive tax system that taxes wealth more fairly and taxes work less, aimed at stopping the continual transfer of wealth to the rich and reducing asset price inflation.
- What does the presenter say about crises of distribution and government debt?
- Crises of distribution arise when deficits are used to protect living standards by transferring wealth to the rich; the argument is that debt built to subsidize the rich can be avoided if distributional issues are addressed through policy changes.