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> As a layman, it still blows my mind that giant companies can operate at such a massive loss for so long, seemingly without any road to profitability. This i

> As a layman, it still blows my mind that giant companies can operate at such a massive loss for so long, seemingly without any road to profitability. This is the effects of quantitative easing on our economy. We wanted to hypercharge our economy and encourage investments after the 2008 crash, but now things have become too bubbly. A lot of these companies that exist today are functionally useless / wastes of money / wastes of time for everyone involved. I feel like the rising interest-rates will fix the problem. The price of "future money" is going up. Just a "little bit of profits" (or even operating for a loss) will be much harder moving forward.

acdha 4y ago
Wasn’t QE introduced to deal with the last round of this? I think the real problem has been the way wealth has been concentrating since the 1980s — the thing all of this has in common from the dotcom bubble on has been wealthy people sitting on huge piles of cash but looking for high return “investments” rather than building real businesses. The first real estate bubble was fueled in part by the large sovereign oil funds looking to recoup their losses from the dotcom bubble, and that’s the same source as much of Uber’s funding. A carbon tax would help with that one in particular but it’s seemed for a while that we just need more pure taxation on passive returns & wealth to discourage accumulation on that scale. The economy just doesn’t work efficiently with a handful of people making so many decisions, especially when they mostly weren’t capable of making that much money with their own skills.
- dragontamer 4y ago
  > Wasn’t QE introduced to deal with the last round of this? The opposite. QE is an inflationary policy, much like lowering interest rates. As the central bank buys up debts in the open market, QE makes loans easier, meaning more companies get cheaper debt to finance their operations. That is: QE inflates the bubble further. Arguably needed in the 2010-era to help us recover from the 2008 recession, we are beginning to see the ill-effects of this policy today. Which is fine, there's a time and place for all of these policies, and the rising interest rates will counteract the ill effects of that. Its a question of "how hard to push the deflation buttons". Pushing too hard risks a difficult recession, pushing too lightly means inflation will get out of whack.
  - acdha 4y ago
    > QE inflates the bubble further. Arguably needed in the 2010-era to help us recover from the 2008 recession, we are beginning to see the ill-effects of this policy today. This is what I was referring to: my understanding was that QE was used to take most of the sting out of the 2008 collapse, but a key driver of the mortgage fraud was all of the people who lost money on unwise dotcom decisions seeking more “safe” higher-yield investments than actually existed.

acdha 4y ago

Wasn’t QE introduced to deal with the last round of this? I think the real problem has been the way wealth has been concentrating since the 1980s — the thing all of this has in common from the dotcom bubble on has been wealthy people sitting on huge piles of cash but looking for high return “investments” rather than building real businesses. The first real estate bubble was fueled in part by the large sovereign oil funds looking to recoup their losses from the dotcom bubble, and that’s the same source as much of Uber’s funding. A carbon tax would help with that one in particular but it’s seemed for a while that we just need more pure taxation on passive returns & wealth to discourage accumulation on that scale. The economy just doesn’t work efficiently with a handful of people making so many decisions, especially when they mostly weren’t capable of making that much money with their own skills.

dragontamer 4y ago
> Wasn’t QE introduced to deal with the last round of this? The opposite. QE is an inflationary policy, much like lowering interest rates. As the central bank buys up debts in the open market, QE makes loans easier, meaning more companies get cheaper debt to finance their operations. That is: QE inflates the bubble further. Arguably needed in the 2010-era to help us recover from the 2008 recession, we are beginning to see the ill-effects of this policy today. Which is fine, there's a time and place for all of these policies, and the rising interest rates will counteract the ill effects of that. Its a question of "how hard to push the deflation buttons". Pushing too hard risks a difficult recession, pushing too lightly means inflation will get out of whack.
- acdha 4y ago
  > QE inflates the bubble further. Arguably needed in the 2010-era to help us recover from the 2008 recession, we are beginning to see the ill-effects of this policy today. This is what I was referring to: my understanding was that QE was used to take most of the sting out of the 2008 collapse, but a key driver of the mortgage fraud was all of the people who lost money on unwise dotcom decisions seeking more “safe” higher-yield investments than actually existed.