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Yep, cue the "free market" folks celebrating poorly-informed transactions between VCs dumping these companies on construction workers investing to try to fight

by gmd63 3y ago

Yep, cue the "free market" folks celebrating poorly-informed transactions between VCs dumping these companies on construction workers investing to try to fight inflation enough to send their kids to college.

rvba 3y ago
Inflation caused by the central bank that gives free money to the rich and makes classic investments in a safety account pay less than inflation. Double whammy of screwing poor people with monetary policy.
- vkou 3y ago
  Why should you putting your money in a savings account ensure that you are protected from inflation? The whole point of an economy is for money to move and be invested, not hoarded by a dragon sleeping on a pile of gold coins.
  - lambertsimnel 3y ago
    Under fractional reserve banking, savings account deposits are lent out, which hopefully does result in productive investment As I understand it, western retail banks that take deposits are fractional reserve banks, and have to be if they pay interest on deposits; after all, banks don't generate revenue from just looking after your money (unless they charge you for it, perhaps in the form of a negative interest rate)
    - vkou 3y ago
      They are indeed lent out, but mostly in very safe, boring investments, that don't really generate economic activity (mortgages). This is by design, as we generally don't want banks going pear-shaped, and taking people's savings with them! If your money is used to generate meaningful economic activity, that means you're investing it into something like stocks (Which anyone can do by opening a Schwab, or a Vanguard, or a whomever account) - which will beat inflation, but on the short-and-medium term, are not a safe investment.
      - rvba 3y ago
        "In the good times" when dollar was backed by gold, bankers would borrow at 3%, lend at 6% and go to a golf course at 3 o'clock. The economy is working incorrectly - due to central banks. Being punished for saving is just insane.
        vkou 3y ago
        > Being punished for saving is just insane. The economy is a prisoner's dilemma. If everyone saved, we'd all be worse off. As such, it makes sense to punish defectors.
        lambertsimnel 3y ago
        Doesn't that depend on what you mean by "if everyone saved"? If everyone saved to the exclusion of entrepreneurial activity, we would indeed all be worse off. However, we'd all be just as badly off if everyone bought stocks to that extent. On the other hand, if everyone saved instead of buying stocks, wouldn't banks and entrepreneurs have a common interest in making loans replace stocks in funding entrepreneurial activity?
        rvba 3y ago
        Central banks already "play" on the market. They arent neutral. So maybe they could stop their inflation policies which screw the little people. I am not writing about socialism. I am writing that central banks should stop the policies that rob the poor and give money to the rich. Yes, there were crisises in the past. There are crisises now. And there will be crisises in the future. But in the past, at least the interest rates on savings beat inflation, so common people could build a safety net. Now you are punished for saving. You can play the stocl market casino (which btw. is connected to price of money from central bank...). Is the central bank for average people, or another corrupted institution made to make the rich even richer?
        kasey_junk 3y ago
        There were major banking panics in the US in 1873, 1884, 1890, 1893, 1899, 1901, 1907 & 1908. All while the US was on a hard gold standard with weak central banks. That’s of course without considering any of the pre and during depression era panics, where there was a quasi gold standard. Savings can either be punished by inflation or risk. That’s an immutable financial fact. The only time you aren’t being punished for savings is if you exist in an economy where money can’t be put to productive use and is thus deflationary. Sometimes that’s good for savers but generally it means you are experiencing bad stagnation more broadly in the economy.
JumpCrisscross 3y ago
> poorly-informed transactions between VCs dumping these companies on construction workers Who is doing this?
- rchaud 3y ago
  Chamath Palihapitiya every time he goes on CNBC to play investment guru while pumping some SPAC abomination that's about to go public.

by gmd63 3y ago

rvba 3y ago

Inflation caused by the central bank that gives free money to the rich and makes classic investments in a safety account pay less than inflation. Double whammy of screwing poor people with monetary policy.

vkou 3y ago
Why should you putting your money in a savings account ensure that you are protected from inflation? The whole point of an economy is for money to move and be invested, not hoarded by a dragon sleeping on a pile of gold coins.
- lambertsimnel 3y ago
  Under fractional reserve banking, savings account deposits are lent out, which hopefully does result in productive investment As I understand it, western retail banks that take deposits are fractional reserve banks, and have to be if they pay interest on deposits; after all, banks don't generate revenue from just looking after your money (unless they charge you for it, perhaps in the form of a negative interest rate)
  - vkou 3y ago
    They are indeed lent out, but mostly in very safe, boring investments, that don't really generate economic activity (mortgages). This is by design, as we generally don't want banks going pear-shaped, and taking people's savings with them! If your money is used to generate meaningful economic activity, that means you're investing it into something like stocks (Which anyone can do by opening a Schwab, or a Vanguard, or a whomever account) - which will beat inflation, but on the short-and-medium term, are not a safe investment.
    - rvba 3y ago
      "In the good times" when dollar was backed by gold, bankers would borrow at 3%, lend at 6% and go to a golf course at 3 o'clock. The economy is working incorrectly - due to central banks. Being punished for saving is just insane.
      - vkou 3y ago
        > Being punished for saving is just insane. The economy is a prisoner's dilemma. If everyone saved, we'd all be worse off. As such, it makes sense to punish defectors.
        lambertsimnel 3y ago
        Doesn't that depend on what you mean by "if everyone saved"? If everyone saved to the exclusion of entrepreneurial activity, we would indeed all be worse off. However, we'd all be just as badly off if everyone bought stocks to that extent. On the other hand, if everyone saved instead of buying stocks, wouldn't banks and entrepreneurs have a common interest in making loans replace stocks in funding entrepreneurial activity?
        rvba 3y ago
        Central banks already "play" on the market. They arent neutral. So maybe they could stop their inflation policies which screw the little people. I am not writing about socialism. I am writing that central banks should stop the policies that rob the poor and give money to the rich. Yes, there were crisises in the past. There are crisises now. And there will be crisises in the future. But in the past, at least the interest rates on savings beat inflation, so common people could build a safety net. Now you are punished for saving. You can play the stocl market casino (which btw. is connected to price of money from central bank...). Is the central bank for average people, or another corrupted institution made to make the rich even richer?
      - kasey_junk 3y ago
        There were major banking panics in the US in 1873, 1884, 1890, 1893, 1899, 1901, 1907 & 1908. All while the US was on a hard gold standard with weak central banks. That’s of course without considering any of the pre and during depression era panics, where there was a quasi gold standard. Savings can either be punished by inflation or risk. That’s an immutable financial fact. The only time you aren’t being punished for savings is if you exist in an economy where money can’t be put to productive use and is thus deflationary. Sometimes that’s good for savers but generally it means you are experiencing bad stagnation more broadly in the economy.

JumpCrisscross 3y ago

> poorly-informed transactions between VCs dumping these companies on construction workers Who is doing this?

rchaud 3y ago
Chamath Palihapitiya every time he goes on CNBC to play investment guru while pumping some SPAC abomination that's about to go public.