3 ms·
A friend who works in a bank had the opportunity to borrow cash from his bank at the rate of 0.9% for 20 years during QE. He borrowed $1m that he now happily in
by d--b 3y ago
A friend who works in a bank had the opportunity to borrow cash from his bank at the rate of 0.9% for 20 years during QE. He borrowed $1m that he now happily invests in 5% yielding bonds.
Not sure this qualifies as Cantillon effect, but it's one of those things that make capitalism deeply unfair. QE was free money for the already wealthy so they could "invest" and keep the general economy running. Not all of these investments made money, obviously, but still, it's a way to fuel the economy from the top.
I always thought fueling the economy from the bottom was a much smarter idea... Giving out unemployment benefits so that the unemployed still consumes, and hence do craete activity from their consumption, rather than engaging in stupid ass 432-Park ave-like projects.
- lurking15 3y ago> one of those things that make capitalism deeply unfair isn't QE precisely an example of a part of a planned economy and the same sort of heavy-handed government in line with socialism & marxism?
- robertlagrant 3y ago> QE was free money for the already wealthy Agree, although I don't think it was only that. But I have a dislike for it for some reason I can't quite articulate. > Giving out unemployment benefits so that the unemployed still consumes, and hence do craete activity from their consumption I'm not saying this is wrong, but I don't understand how this works. My best non-educated guess is economies should create mutual value, not just activity.