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Interest rates are close to zero because everybody wants to save and nobody wants to borrow. It's the working of supply and demand. Savers deserve nothing spe
by QuesnayJr 7y ago
Interest rates are close to zero because everybody wants to save and nobody wants to borrow. It's the working of supply and demand.
Savers deserve nothing special. Nobody is owed a safe investment vehicle with a positive return. If the market dictates that you have to pay people to take your money and hold it for you, then that's how it should work.
- thorwasdfasdf 7y agoi agree with that, if it were determined by market forces. But, when the feds of the world are subsidizing low rates and flooding printing money to buy up bonds, that's not the workings of supply and demand. I mean, it's like if you have a bananna stand, and the gov prints billions of dollars to buy banannas on the open market, and now you have to sell your bananas for 5c a piece.
- QuesnayJr 7y agoIf the government printed billions of dollars to buy bananas, it would show up in prices all around the economy as the money circulated. At full employment -- which we were at up until a week ago -- the only thing flooding the market with money can do is cause inflation. We didn't have an inflation, and interest rates were still incredibly low.