4 ms·

$500b is a lot of opportunity cost being lost. This type of behavior is what motivates the push toward negative deposit rates: This [...] monetary policy tool

• andrewmcwatters 5y ago
  The problem is that you can't push policies that force investors of any size, individual or institutional to make bad investments because the alternative to investing in poor yield or overvaluation might be punitive. But that's precisely the duality of the US market right now. If we had policies in place that basically eroded people's capital and they just had to deal with it because the market was overvalued or yields were so low they're below inflation, you do nothing to uphold the confidence of investors. At that point, they'd literally be better off divesting from the US market and lifting up foreign markets than dealing with a reduction in effective capital from inflationary forces. You'd just be encouraging empowering other nations, and we already do plenty of that by offshoring labor and making it more difficult for us to to pay off debts by removing the flow of capital locally.
• incompatible 5y ago
  Isn't it just a bit of paper, or electronic equivalent, sitting around? It doesn't do anything. I JPMorgan "invested it", then it would just be sitting around somewhere else, since the total amount of cash in the system is controlled by the Federal Reserve or Treasury.