🔍 Is this capitalism?

Is it capitalism when asset prices are influenced by decisions made by a handful of unelected bureaucrats behind closed doors?

Recent research has shown that asset prices like stocks, bonds, and even Bitcoin do not always reflect fundamental values. Instead, prices can be moved by the policy decisions made by central banks and governments. For example, when central banks lower interest rates, investors pour money into riskier investments like stocks and bitcoin to seek higher returns. This increased demand bids up prices beyond what economic fundamentals suggest is reasonable.

While supporters may argue these policies aim to help the economy, the outcomes look like central planning. A small group of policymakers makes decisions in private on how to allocate capital across markets. This excessive power means a handful of technocrats can create immense wealth for asset owners through rising prices while others miss out.

So, an important question is, does this top-down influence on asset prices still fit with the spirit of free-market capitalism? When prices are less connected to organic supply and demand, does it undermine the efficiency and fairness capitalism aims to provide?

I'm curious to hear your thoughts on this! Does centrally influenced asset inflation align with your views on capitalism? Let me know what you think in the comments below.