5 ms·

Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs

Every single person has no simple way to save money anymore. Savings accounts, CDs, and money markets - even high-yield online ones like Ally and Goldman Sachs - pay zero interest or close to it. Simultaneously the government has printed an absolutely incredible amount of money this year that has almost exclusively gone to the wealthy. This is because the fed is buying treasuries / corporate junk bonds and backstopping our entire economy while the actual economy has shrank maybe 10%. A tiny amount of the printed money is airdropped to citizens with direct checks or extended unemployment but this is a tiny amount that is primarily to buy off the commoners so they don’t complain about the enormous wealth transfer happening right now. What this means is scarce financial assets are going to go up, and up, and up. Every person who doesn’t want to lose money needs to become a risk manager and start investing because there is no other option.

ConcreteGidget 6y ago
Its pretty crazy how no one is talking about how only 18% of the stimulus bill is going to individuals. I'm by no means rich but I made 80k passively this year so I don't know which side of the wealth transfer I'm on.
- cwwc 6y ago
  It’s odd how it seems the US is capitalist on the way up, and socialist on the way down (for big co’s and industries - airlines, banks, ect). Good for equity investors. But - Individuals? We’re on our own. A bit crony, in my mind.
  - seibelj 6y ago
    True capitalists do not applaud the crony capitalism common throughout the entire world. Japan’s government now owns sizable percentages or even outright majorities of all major corporations. The endless appetite for debt-fueled stimulus has led to crazy malinvestment that will be an extremely difficult pill to swallow when the bill finally comes due. Why even tax us anymore? If it’s so easy to print new money just sum all the money necessary for the budget and print it fresh. Basically the same thing at this point.
    - OJFord 6y ago
      You can't (I think?) do progressive QE, so for most developed economies that's not the same thing.
    - rat9988 6y ago
      > Japan’s government now owns sizable percentages or even outright majorities of all major corporations Is it a positive or negative thing? (honest question, I don't have much knowledge in this area)
      - harpratap 6y ago
        Very negative. It allows for zombie companies to survive for far longer than they ideally should have. So many companies in Japan that should have gone bankrupt years ago but are still surviving. Also makes everyone complacent and uncompetitive at global scale, which has been the theme for Japan for past few decades.
      - seibelj 6y ago
        The government is not good at creating and sustaining businesses despite their nearly unlimited resources and centuries of attempts. When the government owns large stakes in businesses then the business operations become political, as the government is elected and the government owns the business, so the business is now answerable to voters. The business will be encouraged to make malinvestments in politically important projects and regions, allow unproductive employees to remain, and lead to general stagnation. Some socialists have openly stated that the end goal of democratically run companies can be attained by funneling government money directly into buying equity stakes in businesses, growing over time. This would be an extremely terrible outcome for anyone that likes productivity and efficiency.
- winslow 6y ago
  If you don't mind me asking, how'd you make 80k passively? Investments, properties, or a "passive" sass/tech product?
  - ConcreteGidget 6y ago
    Stock market. Coronavirus was financially beneficial for the corporate portion of the upper middle class.
    - chii 6y ago
      or the value of the dollar has dropped, which makes demand for equities higher (causing their price to rise). You didn't create more wealth - the equities didn't become more productive (cept may be the tech companies did more this year and thus have a deserved rise in price).
    - robjan 6y ago
      You made 80k in dividends or appreciation in the value of your stocks? The latter is not usually considered as "income".
- giantg2 6y ago
  If you make $80k passively, you are above average and likely border on rich.
jokethrowaway 6y ago
What do you think it's going to happen to real estate? I'm a bit reluctant to invest in this market. The situation you described has the potential to wipe off quite a lot of money there as well.
- seibelj 6y ago
  Just find things the government can’t print more of, are desirable to a broad portion of the population, and are resistant to rapid increases in supply in response to demand. Gold, silver, bitcoin, land in desirable places. I also have the normal index funds and certain hand-picked stocks. One issue with stocks is companies can offer more of them in response to demand, unlike land or bitcoin. We are in a period of rapid inflation but mainstream economists and the government pretend we aren’t. It has been going on for decades but the official inflation rate is supposedly sub-2% while healthcare, education, daycare, high-quality food, housing, and all manner of highly-desirable-yet-cannot-be-easily-created assets have gone way up in price and are unreachable to even the middle class let alone the poor. Yet many applaud the “heroic” actions of the central banks and government when all they are doing is printing ever more money and patting themselves on the back. We as individuals need to act in our own best interests to avoid this disaster because no one is going to help us.
  - vbtemp 6y ago
    > We are in a period of rapid inflation but mainstream economists and the government pretend we aren’t. It has been going on for decades but the official inflation rate is supposedly sub-2% while healthcare, education, daycare, high-quality food, housing, and all manner of highly-desirable-yet-cannot-be-easily-created assets have gone way up in price and are unreachable to even the middle class let alone the poor. Can't agree more. Cheap, imported crap remains cheap and crappy, and everyone pretends that because TVs and egg mcmuffins remain affordable to the common man, therefore inflation is under control. Meanwhile asset prices, healthcare, housing, education (i.e., all the real, actual things important for someone's life that take up the bulk of their income) balloon in price.
    - 6y ago
xenihn 6y ago
>What this means is scarce financial assets are going to go up, and up, and up Until they don't...The exuberance I'm seeing lately scares the shit out of me. This is going to be a horrific crash when it comes.
- wtznc 6y ago
  Same feelings here...
  - msandford 6y ago
    I've been feeling that way for a decade at least. As someone once said, the market can remain foolishly optimistic longer than you can remain solvent (while shorting an over inflated stock). Never underestimate the power of everyone doing crazy things to make them not crazy. Housing prices in the US have been crazy long enough that the whole system is bought in to these levels it seems. Of course reality could be different in a few weeks or months but the bubble in real estate has been going on for a significant fraction of my adult life.

ConcreteGidget 6y ago

Its pretty crazy how no one is talking about how only 18% of the stimulus bill is going to individuals. I'm by no means rich but I made 80k passively this year so I don't know which side of the wealth transfer I'm on.

cwwc 6y ago
It’s odd how it seems the US is capitalist on the way up, and socialist on the way down (for big co’s and industries - airlines, banks, ect). Good for equity investors. But - Individuals? We’re on our own. A bit crony, in my mind.
- seibelj 6y ago
  True capitalists do not applaud the crony capitalism common throughout the entire world. Japan’s government now owns sizable percentages or even outright majorities of all major corporations. The endless appetite for debt-fueled stimulus has led to crazy malinvestment that will be an extremely difficult pill to swallow when the bill finally comes due. Why even tax us anymore? If it’s so easy to print new money just sum all the money necessary for the budget and print it fresh. Basically the same thing at this point.
  - OJFord 6y ago
    You can't (I think?) do progressive QE, so for most developed economies that's not the same thing.
  - rat9988 6y ago
    > Japan’s government now owns sizable percentages or even outright majorities of all major corporations Is it a positive or negative thing? (honest question, I don't have much knowledge in this area)
    - harpratap 6y ago
      Very negative. It allows for zombie companies to survive for far longer than they ideally should have. So many companies in Japan that should have gone bankrupt years ago but are still surviving. Also makes everyone complacent and uncompetitive at global scale, which has been the theme for Japan for past few decades.
    - seibelj 6y ago
      The government is not good at creating and sustaining businesses despite their nearly unlimited resources and centuries of attempts. When the government owns large stakes in businesses then the business operations become political, as the government is elected and the government owns the business, so the business is now answerable to voters. The business will be encouraged to make malinvestments in politically important projects and regions, allow unproductive employees to remain, and lead to general stagnation. Some socialists have openly stated that the end goal of democratically run companies can be attained by funneling government money directly into buying equity stakes in businesses, growing over time. This would be an extremely terrible outcome for anyone that likes productivity and efficiency.
winslow 6y ago
If you don't mind me asking, how'd you make 80k passively? Investments, properties, or a "passive" sass/tech product?
- ConcreteGidget 6y ago
  Stock market. Coronavirus was financially beneficial for the corporate portion of the upper middle class.
  - chii 6y ago
    or the value of the dollar has dropped, which makes demand for equities higher (causing their price to rise). You didn't create more wealth - the equities didn't become more productive (cept may be the tech companies did more this year and thus have a deserved rise in price).
  - robjan 6y ago
    You made 80k in dividends or appreciation in the value of your stocks? The latter is not usually considered as "income".
giantg2 6y ago
If you make $80k passively, you are above average and likely border on rich.

jokethrowaway 6y ago

What do you think it's going to happen to real estate? I'm a bit reluctant to invest in this market. The situation you described has the potential to wipe off quite a lot of money there as well.

seibelj 6y ago
Just find things the government can’t print more of, are desirable to a broad portion of the population, and are resistant to rapid increases in supply in response to demand. Gold, silver, bitcoin, land in desirable places. I also have the normal index funds and certain hand-picked stocks. One issue with stocks is companies can offer more of them in response to demand, unlike land or bitcoin. We are in a period of rapid inflation but mainstream economists and the government pretend we aren’t. It has been going on for decades but the official inflation rate is supposedly sub-2% while healthcare, education, daycare, high-quality food, housing, and all manner of highly-desirable-yet-cannot-be-easily-created assets have gone way up in price and are unreachable to even the middle class let alone the poor. Yet many applaud the “heroic” actions of the central banks and government when all they are doing is printing ever more money and patting themselves on the back. We as individuals need to act in our own best interests to avoid this disaster because no one is going to help us.
- vbtemp 6y ago
  > We are in a period of rapid inflation but mainstream economists and the government pretend we aren’t. It has been going on for decades but the official inflation rate is supposedly sub-2% while healthcare, education, daycare, high-quality food, housing, and all manner of highly-desirable-yet-cannot-be-easily-created assets have gone way up in price and are unreachable to even the middle class let alone the poor. Can't agree more. Cheap, imported crap remains cheap and crappy, and everyone pretends that because TVs and egg mcmuffins remain affordable to the common man, therefore inflation is under control. Meanwhile asset prices, healthcare, housing, education (i.e., all the real, actual things important for someone's life that take up the bulk of their income) balloon in price.
  - 6y ago

xenihn 6y ago

>What this means is scarce financial assets are going to go up, and up, and up Until they don't...The exuberance I'm seeing lately scares the shit out of me. This is going to be a horrific crash when it comes.

wtznc 6y ago
Same feelings here...
- msandford 6y ago
  I've been feeling that way for a decade at least. As someone once said, the market can remain foolishly optimistic longer than you can remain solvent (while shorting an over inflated stock). Never underestimate the power of everyone doing crazy things to make them not crazy. Housing prices in the US have been crazy long enough that the whole system is bought in to these levels it seems. Of course reality could be different in a few weeks or months but the bubble in real estate has been going on for a significant fraction of my adult life.