9 ms·
Does anybody else think western monetary policy is largely responsible for this? If you interfere with the denominator of a time value of money formula and push
by boppo1 5y ago
Does anybody else think western monetary policy is largely responsible for this? If you interfere with the denominator of a time value of money formula and push down the discount rate, security prices go up disproportionately to their actual cash flows.
Low interest rate policy might 'create jobs' (inefficient ones), but another direct consequence is that anyone holding ownership of cash flows watches their net worth go up while wage earners get priced out of meaningful ownership of the economy. We've been doing this for more than a decade.
I'm not super-well educated on this topic (just a BA) but so far no one has helped my understanding out with a refutation.