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Good point. Another issue is how many people outside the US have gotten disposable income over the last 50 years. Those people all can now invest some of their

by zpeti 5y ago

Good point. Another issue is how many people outside the US have gotten disposable income over the last 50 years. Those people all can now invest some of their income, creating massive demand for investments. Like what robinhood did, but at a much larger scale. Which isn't anything to do with income inequality, in fact it's about how many many people have gotten richer in the world recently.

Findeton 5y ago
Income inequality is not the problem. Indeed everyone's purchasing power was way lower in the past and still people saved money. People save less money now, and that's one of the problems. Saving money does mean making the sacrifice of not spending it today, perhaps not even in the future. The other problem is called Central Banks. Central Banks need and force low interests, but then gov. debt is not attractive anymore (except for banks, which buy them with money freshly printed by the FED) and people chase higher returns in the general market. So investors end up fishing in equities, creating a bubble. The problem is that companies that consume a lot of physical resources, like Tesla, are pumped... while companies that dig those resources from the ground are not. In the end this increases scarcity and raw materials become more costly. This ends up driving prices up across the whole economy, it's inflation. Created by Central Banks. But of course when it happens many people will blame the free market.
- imtringued 5y ago
  The deposit insurance programs shields you from risk in the market. 2008 introduced a lot of risk that wasn't passed on. So the reason why there is a shift toward taking on personal risk is that the moral hazard in the banking system introduced too much of it to the point that it requires negative rates.
missedthecue 5y ago
yes, I don't think folks appreciate how many people have made fortunes very recently. When Forbes first made their billionaire list in 1987, the counted 140 around the world. Today, there are 228 billionaires around the world with fortunes greater than $10 billion, and 1299 worth at least $2.4 billion, which is the current value of $1 billion 1987 dollars. Most of this is due to the explosion of capital markets, lower interest rates, and a huge part of the global economy freeing up. It's not because they made a bunch of other people worse off.
- deleted 5y ago
  [deleted]

by zpeti 5y ago

Findeton 5y ago

Income inequality is not the problem. Indeed everyone's purchasing power was way lower in the past and still people saved money. People save less money now, and that's one of the problems. Saving money does mean making the sacrifice of not spending it today, perhaps not even in the future. The other problem is called Central Banks. Central Banks need and force low interests, but then gov. debt is not attractive anymore (except for banks, which buy them with money freshly printed by the FED) and people chase higher returns in the general market. So investors end up fishing in equities, creating a bubble. The problem is that companies that consume a lot of physical resources, like Tesla, are pumped... while companies that dig those resources from the ground are not. In the end this increases scarcity and raw materials become more costly. This ends up driving prices up across the whole economy, it's inflation. Created by Central Banks. But of course when it happens many people will blame the free market.

imtringued 5y ago
The deposit insurance programs shields you from risk in the market. 2008 introduced a lot of risk that wasn't passed on. So the reason why there is a shift toward taking on personal risk is that the moral hazard in the banking system introduced too much of it to the point that it requires negative rates.

missedthecue 5y ago

yes, I don't think folks appreciate how many people have made fortunes very recently. When Forbes first made their billionaire list in 1987, the counted 140 around the world. Today, there are 228 billionaires around the world with fortunes greater than $10 billion, and 1299 worth at least $2.4 billion, which is the current value of $1 billion 1987 dollars. Most of this is due to the explosion of capital markets, lower interest rates, and a huge part of the global economy freeing up. It's not because they made a bunch of other people worse off.

deleted 5y ago
[deleted]