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No it just causes more money to go into the stock market as people put everything except a nest egg, there. I wonder whether this ends up decreasing consumption
by mustafa_pasi 5y ago
No it just causes more money to go into the stock market as people put everything except a nest egg, there.
I wonder whether this ends up decreasing consumption, as people are less able to buy impulsively when their money is locked away.
But in my opinion what our problem in Europe is, is a very conservative investment culture at the very top. It is very hard to get funding for anything. No wonder there is barely any growth. Even most flashy startups here get money from government grants.
- jVinc 5y ago> No it just causes more money to go into the stock market A bank run is when people pull their money out the banks. If you want to put your money in the stock market you need to pull it out of the bank.
- mustafa_pasi 5y agoThe banks themselves act as the brokers in most cases. Sometimes the banks themselves get the money because a lot of people put their money in structured investments managed by the bank itself. They aren't pulling the money out of the bank and using a third party broker.
- ping_pong 5y agoThis isn't how it works. When customers pull their deposits out of their bank accounts, the bank can't turn that into loans, which is what drives a lot of the income. If the customers shift that money from the bank account into a trading account in a brokerage, they can't do the same thing with those funds that they do if it were in a savings account.
- wdb 5y agoThat's the idea, less money in the bank; less money to keep at ECB
- imtringued 5y agoIf you buy stocks, someone else sells stocks and has the same problem as you.