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So one thing that people get confused a lot about is they somehow seem to think that to get a stock market, to move up, you have to have increased stimulus somehow in one of the various forms, people talk about stimulus like increased government programs or something. And in reality, that isn't really the way it works.
The way it works is stocks rise. When the future brings positive surprises on a overall basis, and they fall one stocks confront a world that brings negative surprises in an overall basis. And the fact of Pote potential stimulus breaks down into a couple of categories. One of them is that, is it really stimulus or is it really not stimulus?
And a lot of things that people call stimulus actually don't stimulate. So they're for the hope of them could help stocks move forward because they think it's stimulus when it's not. But then when it's not that certainly isn't going to help any the flip side is that when you think about the way stocks move, they move more on the hope and less on the reality because stocks are always forward-looking, as I've said and preached for years, if you've ever heard me talk before, it's one of the most central points people don't get, stocks are pretty much always pre pricing.
The next approximate three to 30 months, whether it's three months at a moment in time or 30 months or 17 months, that's really tricky to try to figure out and is treacherous, but they're always pre pricing the future. So the hope can get priced in before the event. The event can be there for a disappointment in the vein of a sell on the good news.
But in this sense, the reality is that no one of these kinds of features like stimulus are any bigger or more important than all the other things that are going on in the world. And there are so many potentials for positive and negative surprise all the time as we move forward, that when we think about this, this notion of stimulus, even if it's real stimulus, uh, is only one of many factors that are entangled together that give us positive or negative surprise moving forward.
Now I'm just going to go back on the prior point for a moment said simply most of the forms of what people talk about as stimulus don't actually stimulate. Let me give you just a couple of examples of that. Often it's thought that when the central banks increased the of money that stimulus and the answer is maybe it stimulates, maybe it doesn't stimulus happens when people overall take more commercial business activity that stimulus than they would otherwise, if that thing hadn't happened.
But the fact of the matter is for example, in 2020 United States central bank, the federal reserve increased the quantity of money hugely. And a parallel is that the turnover of the quantity of money perfectly offset it. And that when the turnover of money, how often money changes hands and a year goes down in the same proportion that the quantity of money goes up.
There's no stimulus at all. Uh, likewise there's a general sense often that these programs have put money into your hand will stimulate you and maybe they will stimulate you go possible. I give you money, you get stimulated, but the money came from somewhere. It, it wasn't just pulled out of thin air.
And because it came from somewhere you use, you will leave prior savings from someplace else that otherwise would have been invested in something, something else isn't special. And in that regard, is it stimulus or isn't it stimulus net overall? It's really hard to know. And an awful lot of programs aimed at stimulus are actually not only not stimulative, but actually potentially contractionary.
So my biggest point is it's about positive surprise moving forward overall. And this could just be one subset. It isn't the driving feature, whether it's real or not subscribed ,
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