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What I mean is that there can't be more investment without more demand. In the Uber example, there won't be more investment either - if you expect Uber to grow

What I mean is that there can't be more investment without more demand. In the Uber example, there won't be more investment either - if you expect Uber to grow on behalf of other companies, these will be divested. In fact, you could expect decrease of investment with Uber, like with any other new technology (disputable in Uber's case, but for the sake of argument), because the whole point of moving to new technology is to decrease investment needed to maintain the same level of consumption (that is, increase productivity). > all the money from QE will be funneled into consumption They are, after sitting there idly for a while. The bank CEOs have to pay their mistresses and so on. And distribution is important too. The whole problem of debt deflation is that you have money sitting idly (or better say idly circulating in an endless vortex of financial machinations), not being spent on goods and services.

yummyfajitas 11y ago
I think you are confusing investment and cost of operation. Investment is building the new technology, cost of operation is the cost of providing consumption. Increasing investment today will indeed increase production in the future - that's the whole point. *They are, after sitting there idly for a while. The bank CEOs have to pay their mistresses and so on...money sitting idly..." The production is either consumed, invested, spent on government or exported. P=C+I+G+NX. You seem to believe it can be neither C nor I (well sometimes), so are the wealthy spending all their unconsumed income on government or exports?
- asgard1024 11y ago
  > Increasing investment today will indeed increase production in the future - that's the whole point. So you agree that for the investment to be worth it (and thus made), consumption in the future must increase (or at least appear that it will increase to the investor)? That was my point. > The production is either consumed, invested, spent on government or exported. I talked about money, not production. Money can be saved, or in today's world more likely, ran around in circles through the financial system, without ever causing more consumption to happen.
  - yummyfajitas 11y ago
    No, for the investment to be worth it the return needs to exceed the risk free rate. If your sole claim about money is that there needs to be a functioning monetary system so that the consumer can easily transfer value to the producer, I agree.

yummyfajitas 11y ago

I think you are confusing investment and cost of operation. Investment is building the new technology, cost of operation is the cost of providing consumption. Increasing investment today will indeed increase production in the future - that's the whole point. *They are, after sitting there idly for a while. The bank CEOs have to pay their mistresses and so on...money sitting idly..." The production is either consumed, invested, spent on government or exported. P=C+I+G+NX. You seem to believe it can be neither C nor I (well sometimes), so are the wealthy spending all their unconsumed income on government or exports?

asgard1024 11y ago
> Increasing investment today will indeed increase production in the future - that's the whole point. So you agree that for the investment to be worth it (and thus made), consumption in the future must increase (or at least appear that it will increase to the investor)? That was my point. > The production is either consumed, invested, spent on government or exported. I talked about money, not production. Money can be saved, or in today's world more likely, ran around in circles through the financial system, without ever causing more consumption to happen.
- yummyfajitas 11y ago
  No, for the investment to be worth it the return needs to exceed the risk free rate. If your sole claim about money is that there needs to be a functioning monetary system so that the consumer can easily transfer value to the producer, I agree.