So the stock market is unstoppable. Higher rates, no problem, a few down days then the goods times roll again. So where and when does reality catch up? Valuations are still pretty high, especially now that rates are also high. But all that money is still out there, slowly being removed by the Fed, but mostly still out there. And the optimism goes on, really why shouldn’t it, what has happened so far is just the sting of hot sauce that makes the flavor of the burger even better…as long as the trend up resumes. How often and how far, how many times do people have to have their hopes crushed, and how many have to have their hopes crushed beforee they throw in the towel? Seems like it is partly emotional and partly mechanical. There are a lot of people who still believe. And where does all that money go anyway? Every financial instrument created stays in existence until it is retired, so all the dollars created are out there, they need to be cycled through something, stocks, real estate, something, until the value of those things in dollars gets less and less, buy $1000 dollars of stock, have it go to $500, now someone else has the $1000 and you have $500 and some other person has the stock. So what happens? Eventually the cash accumulates in the hands of the lucky or intelligent and then…. they buy the assets at cheap prices, or the value of the dollars somehow goes down? Which i guess is what is happening relative to wages and commodities. Somehow the excess “fake” wealth needs to get wrung out of the system, but where does it go? It is easy to see how it leaves the real estate market or the stock market, things are just worth less in dollars or gold or oil than they were before. But what about all the dollars, where do they go? How do they devalue? Especially in a world where other currencies are even worse.