How anyone can believe in the “Efficient Market Hypothesis” after watching trillions of dollars be wiped off the map and a cascade of liquidations because people were borrowing in one fake fiat currency at a fiat interest rate and plowing it into another fake fiat currency at another fiat interest rate, and then have a quarter of a percent diktat by a handful of Japanese guys in room blow the whole thing up, needs to reexamine their thesis.
Discussion
Maybe it should be called the "relatively accurate Efficient Market Hypothesis." 🤔
Fiat breaks efficient market hypothesis. Or maybe it circumvents is a better way to articulate it.
Can’t have efficient markets when interest rates and money supply are controlled by insiders. Everything is downstream of that centralization and therefore foundationally dysfunctional.
Regulations also hinders efficient market hypothesis imo. There is a lot of regulation.
Bingo. With credit money, it is impossible to have an efficient market as producers cannot differentiate between credit money entering the system or savings entering the system to signal a change in consumers’ savings vs consumption preferences.
There is a strong form and a weak form of the efficient market hypothesis. The weak form only says you can’t get above market returns through technical analysis studying past pricing and volume behavior or without insider knowledge because all public knowledge is already baked into the current price.
The strong form says you can not make above market returns, period, regardless of if you have insider knowledge or not, because even the insider knowledge is baked into the price already.
The efficient market hypothesis doesn’t say it will be a well performing market, only that you can’t make above market returns.
As a general rule it is indeed very difficult without insider knowledge to earn above market returns. Many have tried, few suceeds over the long term. Most dollar cost average because they know they can’t time the market.
The market is completely distorted by individuals setting the money supply and interest rates while having many currencies. It’s all nonsense under this arrangement.
Yes there is distortion created by interest rates / money supply. And those distortions can make it harder for businesses and households to make good decisions. Bad decisions eventually have to meet reality in the form of a “correction” (bankruptcy, reevaluation, sell off, recession, governments defaulting on their debt) . But if you can falsify the efficient market hypothesis then you can make above market returns.