Re:Low interest rates in advanced countries have pushed mone...
by solatic on Wednesday November 24, 2021 @11:56PM
(#29338337)
> Raise interest rates... At the same time, print money
So basically, take everyone sitting on mountains of cash (e.g. Apple) and start to pay enormous returns for keeping that money stationary, instead of investing it in the productive economy?
> Now asset prices come down in real dollars, because people aren't as willing to borrow money to invest when interest rates are high
The economy isn't composed of only "people". There are businesses too. Rising interest rates means that businesses borrow less money to build new factories, hire new people, and expand. Corporate finance takes available interest rates into consideration; it is literally one of the factors on which CFOs decide whether to start a given project or not. That ultimately translates into whether business start to lay people off or not.
Look, I also think that interest rates should be brought up. But I also appreciate that it's not that simple.
So basically, take everyone sitting on mountains of cash (e.g. Apple) and start to pay enormous returns for keeping that money stationary, instead of investing it in the productive economy?
> Now asset prices come down in real dollars, because people aren't as willing to borrow money to invest when interest rates are high
The economy isn't composed of only "people". There are businesses too. Rising interest rates means that businesses borrow less money to build new factories, hire new people, and expand. Corporate finance takes available interest rates into consideration; it is literally one of the factors on which CFOs decide whether to start a given project or not. That ultimately translates into whether business start to lay people off or not.
Look, I also think that interest rates should be brought up. But I also appreciate that it's not that simple.