What's the point of stimulating the wealthy?

 "The market capitalization of all listed companies in India hit a record Rs 161 trillion ($2.11 trillion) on Thursday, as the rebound in several macro indicators and earnings optimism fired up stocks," wrote Sultana and Sonavane. "The World Bank expects India's economy to contract 9.6% FY21, steeper than 3.2% shrinkage projected earlier." The Reserve Bank (RBI) agreed. "In a grim message for the economy, RBI governor Shaktikanta Das said today at the central bank's monetary policy meet that India's GDP for FY21 is likely to contract 9.5%." "Prime Minister Narendra Modi had announced a relief package of Rs 20 lakh crore (Rs 20 trillion) or about 10 percent of GDP" but the actual fiscal cost of the relief measures announced by Finance Minister Nirmala Sitharaman amounted to just Rs 1.50 trillion, or 0.75% of GDP. Global securities research firm Sanford Bernstein termed the stimulus measure a "lost opportunity". Given all the dark predictions why the explosion of "irrational exuberance" in our stock markets? "The surge in global liquidity, balance sheet expansion by central banks, and stimulus measures by governments have contributed to the overall rally in Indian equities for the past few months, said Prasanna Pathak, head-equity and fund manager, Taurus Mutual Fund." The global economy is expected to shrink by at least 4.3%, according to a report. But, "The wealth of the world's billionaires reached record heights this year despite the global coronavirus crisis, led by tech, health and industry 'innovators and disruptors' like Elon Musk, said a report." Regarding the S&P 500 in the US, Wang and Ballentine wrote, "All year, no matter how bad things have gotten, investors have located a bright side." Traders expect a second stimulus from the Congress. Also, "Thanks to another source of stimulus, the Federal Reserve, it's been virtually impossible since March to convince traders that any threat to the market will prove permanent." There is a "clear disconnect between the sharp surge in the stock markets and the state of the real economy, as surplus liquidity was driving up asset prices across the world", said Governor of RBI Shaktikanta Das. The RBI created excess liquidity in banks to the tune of over Rs 8 trillion, wrote Aaryan Khanna. In the latest meeting of the new Monetary Policy Committee (MPC), the RBI "opened its liquidity tap further", wrote an editorial in the Times of India. Fund manager Nilesh Shah said that equity markets will be comfortable with the RBI governor's prediction that "liquidity will be there for a long period of time and there will be policy rate cuts as and when inflation comes down". Economists expect retail inflation to rise to 6.88% in September, which gives a real interest rate of minus 2.88%, which means savers will continue to lose money while the rich will get richer through rising value of their portfolios. The RBI seems to be part of the crony capitalist system. How unfortunate.