When the govt runs a deficit to inject wealth into the private sector, the wealth is spent boosting corporate profits and influences inflation. The fallout from the preference to spend was explored in the profits and inflation section.

The preference to withhold the wealth (ie save it by storing it on your balance sheet) the more it will affect the valuation of existing assets esp equities.

This section will explore possible upside-down outcomes from stimulative fiscal policy on market valuation:

• 1. Understand the marginal saver
• 2. How do market injections influence valuations?
• The upside down outcome