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savings and accurate interest rates fuel a health economy, not debt.
by djschnei 10y ago
savings and accurate interest rates fuel a health economy, not debt.
- smallnamespace 10y ago> savings Every debt is matched by an equal and opposite asset. Savings create debt. http://www.investopedia.com/terms/b/bank-deposits.asp http://www.investopedia.com/terms/b/bank-deposits.asp E.g. you give a bank $1, it creates a liability for $1 on its balance sheet, and it also goes out and lends that cash to someone (allowing it to create debt somewhere else). The question you should be asking is not the total level of debt, but which groups in the economy are indebted. I agree that consumers as a whole should have positive savings.
- djschnei 10y agohttp://www.investopedia.com/terms/f/fractionalreservebanking.asp http://www.investopedia.com/terms/f/fractionalreservebanking... Beyond that, I said "and" not "or". Interest rates and savings should be organically tied together. They should signal each other. Nowadays, they do not.
- smallnamespace 10y agoNo doubt we all, including central banks, would be happier if rates were at 5% instead of 0%, but then we'd have much worse mass unemployment as an aftereffect of the financial crisis. The 0% bound you see today is the lesser of two evils.
- djschnei 10y agosolve government tampering with more tampering while continuing to blame "captialism". Glorious.
- hx87 10y agoWhat is savings, if not a loan to an institution?
- djschnei 10y agoI said saving AND accurate interest rates, not "or".