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[–] 3086085? 0 points 14 points (+14|-0) ago 

Correct me if I'm wrong, but if the Fed's interest rate is zero, they're giving money essentially for free to banks to get interest on, and if they give a negative interest rate, then they will be literally providing built-in profit, e.g. charging $95.00 to give the bank $100.00 for the bank to turn around and loan that money to someone.

Is this welfare for banks too big to fail and too rich to bother loaning money, so they need to be spoon fed profits?

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[–] canbot 0 points 8 points (+8|-0) ago  (edited ago)

It's worse then that. By doing this they drive down the value of money and as a result drive up the cost of goods. So by burrowing at 0 and buying up everything of value they make a better return then by loaning out the money.

So for the 99% your paycheck becomes worth less and for the 1% they get to vaccum up all the wealth, and get paid to do it.

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[–] 3086717? 0 points 1 point (+1|-0) ago 

And then there's the repercussions from all of that.

We have a populace where the majority are in debt and barely capable of paying for food and shelter.

Who's buying all the shit in stores? Yeah, the 1% have money, but they can only buy so many pairs of pants. There's tons of articles on the massive food waste from grocery stores not selling food in time (because people are too poor to PAY FOR all of this produce and meat that's covering all of the shelves), but there's also all the physical goods that don't break down.

All of the mass-produce' plastic and clothing doesn't just magically vanish when it doesn't sell.

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[–] rwbj 0 points 1 point (+1|-0) ago 

Look at the economy from a bigger picture scale. We have a very debt based system. About 97% of money is brought into existence as debt. And that debt is eventually paid off using other peoples' debt which they in turn pay off using somebody else's debt and so on. It's kind of like a game of hot potato where you constantly need ever more debt coming into existence to keep passing the potato. When people stop lending or investing then we start reaching the point where that potato is going to drop. And it will eventually but the idea is to delay it as long as possible. We have an idiotic economic system but are so invested in at this point that we can't change it.

This graph from the fed illustrates things quite clearly. The United States as a whole (and not just the government) is more than $59 trillion in debt (that's more than $180k of debt for every man, woman and child in the USA) and that figure is skyrocketing. In 1980 before Reagan came into office that figure was 'just' $4 trillion. The giant debt machine only temporarily stumbled during the 2009 recession that was caused by a brief acknowledgement that we're creating lots of debt that isn't very good. But in reality, none of it's good. It's funny money, but so long as we keep playing hot potato with the debt we can keep kicking the can onto another generation to deal with.