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The investor class saw inflation marginalizing their endeavors, and they got us to target price stability as the goal instead of full employment. The controls,
by platz 8y ago
The investor class saw inflation marginalizing their endeavors, and they got us to target price stability as the goal instead of full employment.
The controls, liquidity of global capital, and action of the central banks that maintain price stability, end up suppressing wage growth.
So we have a world in which rather than the debtor’s paradise we had in the 70s, we have a creditor’s paradise now.
https://youtu.be/X5JI0_i_Xik?t=21m44s https://youtu.be/X5JI0_i_Xik?t=21m44s
- lifty 8y agoI am not sure I follow your reasoning. Taking into account the low interest environment that we have gone through in the last 10 years how can it be a creditor’s paradise?
- platz 8y agoThey don't need super-high interest rates to lock in their returns. They need investment predictability, and can make up the difference with scale and global arbitrage. From the other perspective, if your wages don’t rise, and your debts are there and your debts — particularly the student debts — are guaranteed by God himself that you can never default on them — you’re a debt peon.