Why exactly would people sell there stocks faster if the gov would by a large amount of it?
Is there historical precedent?
Discussion
Because that would mean a stock that needs to be propped up, or bailed out has weak fundamentals, and cannot grow on its own.
Thus signaling to people that stock is unprofitable thus not worth investing into, and additionally to exit, and absorb that liquidity before anyone else could causing a downward spiral of selling, this accelerated selling would accelerate more selling especially with algorithms which amplify market action.
I am sure there might be but I am not currently aware of any specific examples.
But the state isn’t buying the stocks. It’s lending out free money to banks so they can stimulate the economy (doesn’t work) but the state isn’t buying stocks into its balance sheet?! Genuinely asking
In the case of The United States then you are correct, The U.S. does not own stocks on its balance sheet.
I was simply making a point about hypocrisy, how The Government Buying Bitcoin is "Good" according to some, while The U.S. making a Sovereign Wealth fund, or other similar practices would be considered Bad by those people.
Generally speaking, I see Bitcoin as money meant to be utilized, and spent, not as some scarce rock that everyone has to be paranoid about, and "HODL" indefinitely.
Bitcoin is valuable money but one that needs to circulate.
I really don’t understand the general notion of this circulation idea. Sounds Keynesian to me. The same nonsense argument that a fixed gold based monetary system would be to stringent.
If less is circulating, then less is hunting the same products so the value of it rises in comparison to the products (they get cheaper).
Some people are just saving their monetary time for later.
If than all of a sudden all of them want to buy the same thing with it it will drop in purchasing power.
So why exactly would it need to circulate? It will circulate the right amount people feel the need to buy things with it they desire.
Bitcoin's intended use case was a method to transact without intermediaries like Banks, and Governments.
I understand that Bitcoin is considered to be Deflationary over the long term, and that people would want to save a currency that is Deflationary.
However, Bitcoin's value comes from its utility which is being used as a medium of exchange, if no one is transacting with Bitcoin then Bitcoin has no utility hence no value.
Additionally, when money isn't being spent then the economy doesn't have liquidity for hiring, more production, or getting more resources.
I am approaching Bitcoin from the angle of its intended use as sovereign money to free people from oppression, not as an asset which appreciates.
Circulation is important for Bitcoin to grow, and improve its utility, and value.