Re:US banks sitting on unrealized losses of $620B
by pas on Monday March 13, 2023 @09:12PM
(#35145930)
record profits mean corporations were able to raise prices successfully, because people had the money to spend
of course the problem is that there is a logical gap between that and what people will actually have in their wallets in the future
but, considering that profits are distributed as dividends, invested and/or simply spent in other ways it means there's going to be more aggregate demand, which will push up prices even more.
hence the usual decision to raise rates. which then pushes up unemployment, because it's what empirically almost always happens.
of course the problem is that there is a logical gap between that and what people will actually have in their wallets in the future
but, considering that profits are distributed as dividends, invested and/or simply spent in other ways it means there's going to be more aggregate demand, which will push up prices even more.
hence the usual decision to raise rates. which then pushes up unemployment, because it's what empirically almost always happens.