4 ms·
The rates are low precisely because there is an oversupply of saved money. In other words, capital is so easy to get that nobody has to pay much interest on it.
by neolefty 9y ago
The rates are low precisely because there is an oversupply of saved money. In other words, capital is so easy to get that nobody has to pay much interest on it. It's a borrower's market and will continue to be as long as we have the concept of "saving for retirement".
- inetknght 9y agoIt's a borrower's market because that saved money is in _businesses_ instead of _personal accounts_, no?
- Spooky23 9y agoNo. Businesses that generate cash export it overseas to avoid taxation. The Fed basically makes banks maintain huge capital reserves, and allows them to borrow money for nothing. The banks don't pay for your money because the Fed is printing it for them. Because they need to maintain these massive capital reserves, we get the benefit of printing money without circulating it.