Ugh. These sort of pseudo-intellectual articles that mix economics and politics are my least favorite things to see on this site. They are super misleading and play towards people's biases about how they view the world while selectively interpreting the sparse data they present to do so.<p>An example:<p>If there was too much money, you would think that bond yields would go down. Look here: <a href="https://www.cnbc.com/quotes/?symbol=US30Y" rel="nofollow">https://www.cnbc.com/quotes/?symbol=US30Y</a> -- looks like they are! Guess we can all go blame the fed and "trickle down". But oh wait, scroll out to a longer time-span. Looks like yields have been falling ~linearly from 1989 till today, 2019. Show me where QE/ZIRP started based on the chart. You can't, because the trend didn't change at 2008/9. All this "blame the fed, im smarter than them and would've not done QE" nonsense maybe isn't as supported by evidence as some would like. The world is a little more nuanced than that.
On the surface level, the data seems to agree, but you look a little deeper and it quickly becomes apparent it's all bullshit trying to spin a narrative.
I've wondered if, in this context that we are in, it actually starts to make sense to both raise interest rates and simultaneously monetize government debt.<p>We <i>want</i> some inflation, but we also do not want a late-1980s-style Japanese asset price bubble.<p>I cannot find a real answer to this question anywhere - would this plan produce any negative effect? The plan would, as far as I can tell, help the long-term outlook of our currency and economy while incentivizing wealthy people to stay invested.<p>I might be missing something obvious. Maybe this would lead to businesses having a harder time employing because of the higher borrowing cost (but we are at full employment now), or maybe the effect is just too uncertain on the money supply. Either way, I really want to know the answer, so I'm asking it here.<p>To be clear, I am not suggesting that politicians have direct control over monetizing debt, but rather that the central bank deems this to be best for the economy in the long term.
> "How we got here:<p><pre><code> The Fed's quantitative easing program pushed the cost of borrowing money to next to nothing for nearly a decade, allowing companies to splurge on debt for mergers and acquisitions and to boost revenue."
</code></pre>
Put another way, the Fed made the rich richer, and the lack of significant "trickle down" has created a socio-political Charlie Foxtrot; of which the Fed is not accountable for.
How misleading.. There are a ton of places to invest money. My personal favourite are businesses and real estate.<p>There's two things in common with businesses and real estates as a form of investment:<p>1. They build equity for you in two ways: cash flows and appreciation<p>2. Businesses & real estate are some of the most transparent vehicles when it comes to doing research on whether it's a good investment or not. This is in comparison to investments like stocks where information might not be as transparent or as easily accessible as doing research for a real estate or a business.<p>Not only that but when it comes to an investment like real estate, some people are unknowingly leveraging in an environment where real estate has consistently appreciated 4% per annum for the past hundred years.<p>Consider this:<p>If you purchase a $100,000 house at fair market value for 10% down, you borrow $90,000 and drop $10,000 as down payment.<p>If it appreciates at the historical average rate of 4% per annum, your house is worth $104,000 next year.<p>You sell your house at $104,000, and paying off your mortgage ($90,000), you pocket $14,000, a 25% return on investment ($4000/$10,000).<p>Obviously this excludes variables like rent, interest, or mortgage but the illustration shows how a simple real estate investment can turn out to be a far better investment than it would otherwise show on paper (4%).<p>If there are 'too few places' to invest your money, there's always businesses or real estate. There's a compelling article here that further suggests why real estate might be the most consistent way of building wealth: <a href="https://digitalyse.io/why-real-estate-investing-is-the-most-consistent-way-of-building-wealth/" rel="nofollow">https://digitalyse.io/why-real-estate-investing-is-the-most-...</a>
and literally every asset class exploded. Isn't this the very definition of inflation...?<p>Another view would be that money is simply losing value. a million is not what it used to be.
What about investing it in the planet. Fund lobby groups. Fund companies working on alternative energy tech. There was a (YC funded?) startup on here recently looking to turn air and water into fuel in an efficient enough way. That sort of stuff. Unless the goal is purely to maximise gains of course. Announce "I am investing 10Bn in climate change startups over 50 years", so that people can plan their career around this.
If people and companies have so much money that <i>they literally don't know what to do with it</i>… is giving it away so ridiculous? There are so many worthy causes in the world. Is there really a point to acquiring more wealth if you're that rich?
Ironically the best thing they can do to create new investment opportunities is pay their workers more, but they never will because they are too short sighted.
The biggest consequence of easy money is market concentration afforded by stock repurchases of the past decade. I don’t know if we will ever be able to return to anything even close to normalized ten-year rate. People couldn’t “deal” with 3% and this goes back to the fact that corporate America simply do not develop high-risk high-return businesses because the hurdle rate is so low. These two factors will lead to a dramatic decrease in innovations.
Companies with money can definitely invest into/buy my deep learning startup at any time. :)<p>It enables .NET developers to use full TensorFlow and some other Python frameworks.<p>$1.5M e-checks can be forwarded to email: contact AT losttech.software :-D