3 ms·
They buried it, remember, they didn't invest it into CD's with high interest rates. If they did put it in a bank, then your whole point is moot, because any ban
by lend000 5y ago
They buried it, remember, they didn't invest it into CD's with high interest rates. If they did put it in a bank, then your whole point is moot, because any bank that pays interest is actually lending your money to generate that interest, so the capital was actively involved in the economy the whole time.
An aside: pre-central banking, that isn't how interest rates really worked. Inherently, interest rates increase with inflation. The opposite exists only at far below-market interest rates as an artificial byproduct of the way central banks typically inject money into the economy (by buying cheap/low interest government bonds), which paradoxically contributes to inflation.
- notahacker 5y agoThe Rockefellers (and anyone else burying their money) don't earn the high interest rates, but higher interest rates for everyone else are necessary to push inflation down to zero. Other generally wealthier savers will benefit from that compound interest, but anyone who borrows money will be worse off. That's a lot of productive poorer people's purchasing power reduced to preserve that of people who choose not to participate in the economy
- arcticbull 5y agoAnyone who borrows money is better off in an inflationary environment because your loans are denominated in the dollars over the year of issue, but you repay them in inflated dollars. This means anyone with a mortgage, a credit card, or any other kind of loan debt.