Savvy Trades and Investments

[wadegarret]

littlejohn, here's why it doesn't matter

if the boss gives a raise, as far as the affect on the economy and stock market. So lets say in 2021, it cost 40% more to live than in 2020. Many employees will ask for a raise, but the boss never wants to give one, and may find some reason(as you point out)not to give it. Lets say all employees in all companies around the country are in the same boat and stay on board despite not getting a raise, but inflation keeps growing. Then what happens ? Simple, millions of consumers stop consuming as much, in order to live on the same salary. Companies of all kind, retailers of all kind, restaurants, etc see large decreases in revenues, and in the next earnings report, show much lower profits.

The end result to the stock market is the same though as if all employees around the country gave a raise to cover inflation. That is, when wage inflation would rise substantially, the fed would be forced to raise interest rates, which in turn would cause a correction in the stock market. The way I see it, the fed can bs all they want, but there is no way inflation will be transitory, and the stock market will correct one way or another, be it from fed interest rate increases, or from consumers going broke.