4 ms·

My question: Who isn't holding the bag in this climate?

by pcdoodle 3y ago

great_psy 3y ago
Rich people woo don’t have any debt and can scoop things up for cheap
- lumost 3y ago
  Messing with the money supply hits it’s natural end? Leave interest rates low - inflation burns up asset prices. Run high? Asset prices fall as NPV values future cash flows less. At some point we have to fix structural economic problems without the money printer.
  - great_psy 3y ago
    How can we fix the problem without the money printer ? There’s so much debt, individuals, corporations and governments are all deep in debt. We can just pretend the debt does not exist (restructuring) but that’s pretty much the same as printing that amount of money, just done in a different way. The only non-printer way is to get some sort of exponential productivity gain. Maybe if we get the absolutely best case for AI that could give the productivity gains we need. Obviously assuming the benefits of AI are shared in an equitable way.
- gruez 3y ago
  Rich people aren't storing their wealth by hoarding cash. They're investing in bonds/stocks, both of which are taking a beating.
- reqqqles 3y ago
  How rich are you talking? If I have 50K to invest, what am I supposed to be scooping?
  - great_psy 3y ago
    You could scoop up some bonds yielding 5-10% depending on your risk tolerance. Could wait for stock market to drop (if it a happens) and grab some of your favorite companies for cheaper
injeolmi_love 3y ago
Right now? Short term t bill holders. They rollover so fast that interest rate hikes don’t affect the principle, since you just wait for them to expire then immediately grab the new higher interest rate. Tether (issues usdt) is winning big right now because they mostly hold short term t bills.
- user_named 3y ago
  Principal
- astrange 3y ago
  > Tether (issues usdt) is winning big right now because they mostly hold short term t bills. Well, they claim to. Since Tether is officially sitting on a giant money printer, their best strategy is to do absolutely nothing but count their money. So insofar as they're doing anything else it suggests they're lying.
  - injeolmi_love 3y ago
    In order to maximize cash flows, Tether has an incentive to grow the wider crypto ecosystem. Matt Levine wrote an excellent explanation in one of his recent “Money Matters” newsletters. After the BUSD debacle, it’s clear that onshore and regulated reserves for stablecoins are a huge risk for defi dapps built on top of them. US policy regarding USDC and other such US regulated stablecoins are at risk of change at any time. Since well designed defi dapps are not upgradeable, future policy risks must be considered when choosing which stablecoin to utilize. USDT’s offshore and opaque balance sheet is proven safer for defi dapps than US regulated stablecoins. I wish this weren’t the case, but it’s proven in practice.
balderdash 3y ago
It’s not as bad as it sounds if you’re an unlevered hold to maturity investor. If you bought a 10 year treasury 2 years ago at a rate of return you found acceptable, you’re still going to earn that return (actually a little better), but you are just looking at a mark to market loss that will resolve itself over the next 8 years.
- nly 3y ago
  Except you're being hammered by inflation and you can't get out to invest anything else because of the market loss.
  - balderdash 3y ago
    Read the comment - hold to maturity, acceptable rate of return at investment
    - prepend 3y ago
      Hold to maturity investors change when inflation shifts so much. Someone may have bought 10 year 2% notes intending to hold to maturity because they thought inflation would stay at 1% and they just wanted to park cash. But with inflation at 3-5% they now need to dump and buy something else. People change their tactics to achieve their strategy.
      - balderdash 3y ago
        Except I picked two years ago for a reason. Inflation was like 6.x%, today it’s like 3.x%…
        user_named 3y ago
        Still wrong
    - user_named 3y ago
      The rate of return is no longer acceptable
naveen99 3y ago
Labor

My question: Who isn't holding the bag in this climate?

great_psy 3y ago

Rich people woo don’t have any debt and can scoop things up for cheap

lumost 3y ago
Messing with the money supply hits it’s natural end? Leave interest rates low - inflation burns up asset prices. Run high? Asset prices fall as NPV values future cash flows less. At some point we have to fix structural economic problems without the money printer.
- great_psy 3y ago
  How can we fix the problem without the money printer ? There’s so much debt, individuals, corporations and governments are all deep in debt. We can just pretend the debt does not exist (restructuring) but that’s pretty much the same as printing that amount of money, just done in a different way. The only non-printer way is to get some sort of exponential productivity gain. Maybe if we get the absolutely best case for AI that could give the productivity gains we need. Obviously assuming the benefits of AI are shared in an equitable way.
gruez 3y ago
Rich people aren't storing their wealth by hoarding cash. They're investing in bonds/stocks, both of which are taking a beating.
reqqqles 3y ago
How rich are you talking? If I have 50K to invest, what am I supposed to be scooping?
- great_psy 3y ago
  You could scoop up some bonds yielding 5-10% depending on your risk tolerance. Could wait for stock market to drop (if it a happens) and grab some of your favorite companies for cheaper

injeolmi_love 3y ago

Right now? Short term t bill holders. They rollover so fast that interest rate hikes don’t affect the principle, since you just wait for them to expire then immediately grab the new higher interest rate. Tether (issues usdt) is winning big right now because they mostly hold short term t bills.

user_named 3y ago
Principal
astrange 3y ago
> Tether (issues usdt) is winning big right now because they mostly hold short term t bills. Well, they claim to. Since Tether is officially sitting on a giant money printer, their best strategy is to do absolutely nothing but count their money. So insofar as they're doing anything else it suggests they're lying.
- injeolmi_love 3y ago
  In order to maximize cash flows, Tether has an incentive to grow the wider crypto ecosystem. Matt Levine wrote an excellent explanation in one of his recent “Money Matters” newsletters. After the BUSD debacle, it’s clear that onshore and regulated reserves for stablecoins are a huge risk for defi dapps built on top of them. US policy regarding USDC and other such US regulated stablecoins are at risk of change at any time. Since well designed defi dapps are not upgradeable, future policy risks must be considered when choosing which stablecoin to utilize. USDT’s offshore and opaque balance sheet is proven safer for defi dapps than US regulated stablecoins. I wish this weren’t the case, but it’s proven in practice.

balderdash 3y ago

It’s not as bad as it sounds if you’re an unlevered hold to maturity investor. If you bought a 10 year treasury 2 years ago at a rate of return you found acceptable, you’re still going to earn that return (actually a little better), but you are just looking at a mark to market loss that will resolve itself over the next 8 years.

nly 3y ago
Except you're being hammered by inflation and you can't get out to invest anything else because of the market loss.
- balderdash 3y ago
  Read the comment - hold to maturity, acceptable rate of return at investment
  - prepend 3y ago
    Hold to maturity investors change when inflation shifts so much. Someone may have bought 10 year 2% notes intending to hold to maturity because they thought inflation would stay at 1% and they just wanted to park cash. But with inflation at 3-5% they now need to dump and buy something else. People change their tactics to achieve their strategy.
    - balderdash 3y ago
      Except I picked two years ago for a reason. Inflation was like 6.x%, today it’s like 3.x%…
      - user_named 3y ago
        Still wrong
  - user_named 3y ago
    The rate of return is no longer acceptable

naveen99 3y ago

Labor