News for hackers. Stuff that matters.

A comment on Wealth doesn't trickle down – it just floods offshore, research reveals (2012). Parent comment

Re:Wealth doesn't trickle down – it just floods offshore, re... by vkou on Sunday April 10, 2016 @10:12AM (#11466155)
Consumption drives investment. Why on earth would you spend 10 million dollars to build a widget factory, when nobody has the money to buy widgets?
[ Parent | on HN ]
Re:Wealth doesn't trickle down – it just floods offshore, re... by skylan_q on Monday April 11, 2016 @10:54AM (#11471877)
Consumption drives investment. There's always demand.

Savings fund investment. The more savings there are, the cheaper it is to find funds for investing in a project. The cheaper the capital expenditure, the easier it is to turn a profit.

Or are you talking about the paradox of thrift?

[ Parent | on HN ]
Re:Wealth doesn't trickle down – it just floods offshore, re... by vkou on Monday April 11, 2016 @12:43PM (#11472898)
The first thing you do before investing in a new market is asking the question: "What's the return on this? Will anyone buy the things I'm selling? Are the margins positive?"

Having a lot of money searching for an investment won't do you any good when your widget factories don't have customers. Yes, borrowing money to build the factory will be cheap - but you still expect the factory to produce a return on your investment!

[ Parent | on HN ]