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How would that be different from the people who buy the S&P500 instead of spending their money and generating economic activity?
by TehShrike 3y ago
How would that be different from the people who buy the S&P500 instead of spending their money and generating economic activity?
- jandrewrogers 3y agoIf you buy the S&P500 then someone else sold the S&P500 for the same amount of money. The cash doesn't disappear, it just moves to a different person who presumably sold the S&P500 because they need cash to spend it. That is quite different than sitting on cash.
- TehShrike 3y agoHow is it significantly different than what happens when banks invest money that is left in checking/savings accounts?
- vkou 3y agoIn a deflationary economy, banks offer negative interest rates. You don't put your money in a savings account (which are lent out) in one, you put it into a vault.