Run to the Store

The DOW has run 1000 points to a record high three times this year.

It is now above 22k.

Things must be great, but as many business analysts point out, equity values continue to run higher against slow GDP. The divergence is a bad indicator, but it is not “disconnected” from the real economy as mainstream analysts describe it.

What is the attributive value? (See articles on attributive value by griffithlighton published on the World Wide Web.)

Equity markets are a store for accumulated risk-value. (See articles on risk-value by griffithlighton published on the World Wide Web.) The risk is easily experienced by considering whether to buy at “current” levels. The store of value, which then exists as a form of currency (having useful value on demand), has a causal attribution.

After the wealth of the nation has been consolidated, it is then necessary to run it to the store. The store of value (the gross product, referred to as wealth, in the form of useful capital) is grossed to form a large number — a measurable, empirical value, currently at record levels, and on the run, chasing yield, to avoid the fully assumed risk of loss.

Demand for equities as a store of value yields higher equity prices. Equities run up since the risk-free rate (having the full faith and credit of the Federal Government) is really low. The low, risk-free rate measures slow GDP and the fast run up in equities as being fully connected, indicating the actual attributive value, existing on demand, running to the store.

Blue-chip equities are at record levels, but so is the risk associated with it, having been consolidated to form the gamma-risk dimension. (See articles on the gamma-risk dimension by griffithlighton published on the World Wide Web.)


About griffithlighton

musician-composer, artist, writer, philosopher and political economist (M.A.)
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