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Could you explain how low interest rates for savers would discourage investing?

• nickff 10y ago
  If interest rates are low, the marginal investor sees little benefit to deferring the enjoyment of their earnings. A great deal of bonds and bank deposits are used to finance corporate investments in human resources and technology; from giving a line of credit to a family owned restaurant to buying an SMA line for an electronics manufacturer.
  • guelo 10y ago
    That makes no sense at all to me. If a company wants to borrow money to finance corporate expansion low rates is a great time to do it because the money is cheap.
    • jessaustin 10y ago
      Parent is talking about investors, not about firms. From afar, there seems to be a great deal of overlap. Up close, not so much. An eternal task for executives is convincing owners that the firm shouldn't just sell all its assets and distribute the proceeds.
• keithnz 10y ago
  there was a HN post recently ( that I can't find at the moment ) saying that low interest rates are a motivation for people to do silly things in the financial markets to get better returns.