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Is that not just the other side of the same coin ? Short of centralized banking printing money there is no competition for wealthy just hording and letting time

• ericd 6y ago
  Eh the wealthy don’t hold onto stacks of cash, they immediately turn around and invest the vast majority of it in company equity, bonds, etc. Not sure if there’d be some sort of hoarding cash crunch in the absence of central banking, I haven’t studied the history there.
• missedthecue 6y ago
  Can you explain how one "hoards money"? Like are they burying it in their backyard or stuffing it in their mattress? Do they have a McScrooge money pit?
  • throwaway316943 6y ago
    On a gold standard you can literally hoard it in a vault without losing value. Without inflation it’s actually not a terrible idea because you have high liquidity, you don’t have to sell assets to free up cash. You’d still buy assets but only the ones you actually needed or wanted rather than as a hedge against inflation.
    • Robotbeat 6y ago
      What’s wrong with investing in productive machines (or productivity enhancements) as a hedge against inflation instead of just burying the talents and letting them go to waste?
  • Judgmentality 6y ago
    I don't think it's a revelation that lots of ultra wealthy people hide money in offshore bank accounts, as well as other means. I'd say many of them are literally hoarding it.
    • missedthecue 6y ago
      If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc...
      • dctoedt 6y ago
        > If it's in a bank account, it's not being hoarded. It's being loaned out and the people who get the loans are spending it on houses, businesses, automobiles, etc. This presupposes banks actually loan it out — which doesn't always happen, for example if lending officers are gun-shy or underwriting policies get too tight because senior management is gun-shy.
        • missedthecue 6y ago
          Banks aren't charities. It costs a good bit of money to keep deposits, on top of the interest expense. (deposit insurance, overhead, staff, etc...) I think it's highly unlikely that these overseas banks that the rich use are doing nothing but sitting on their money and this practice accounts for all the purported "hoarding".
          • dctoedt 6y ago
            From the St. Louis Federal Reserve: "Lending growth slowed to zero during the 1990-91 and 2001 recessions but recovered after a few quarters. In contrast, during the Great Recession (2007-09), loan growth became strongly negative and remained so for almost four years." https://research.stlouisfed.org/publications/economic-synopses/2016/02/05/bank-lending-during-recessions https://research.stlouisfed.org/publications/economic-synops...
            • missedthecue 6y ago
              Yes, I understand that the growth of new loan originations experiences vicissitudes based on general economic conditions. That's not my point. My point is that loan growth slowing is not the rich hoarding all the money. They don't hoard. Hoarding is not only unprofitable, it costs money.
• OminousWeapons 6y ago
  It's true that capital begets more capital, but that's because anyone with money lends it back out seeking growth. Even if you have very little money and you put it in a bank account, you are lending that money to the bank for them to invest or lend out. Basically no one is just sitting on piles of physical cash, because if you did so you would lose value behind inflation.
  • throwaway316943 6y ago
    Well we are talking about non inflationary systems compared to inflationary ones.