Message from @hcaez
Discord ID: 533033720404246548
right the fed sets the interest rates on the money that they give out
but im asking for specific examples of individuals or banks that pulled money from the fed because of the 0% interest rate and invested it in a bad way
@hcaez benchmark for the banks
It isn't the banks who invest, but the people
well yeah individual investing is a decent chunk, but most investment is done by large banks such as vanguard, boa, merrill lynch
these big banks are the primary "customers" of the fed
I wouldn't say most
most investing is done by ordinary people
ordinary companies
Who see this 0% rates and make bad decisions
Rates should be controlled by the free market
you may be surprised but its really banks who do the majority of investing in the economy
ordinary people just don't match up to the 5 trillion of assets that vanguard has alone, even when you collect the people in large groups
I'd say it's both, either way it does cause malinvestments.
I can't give specific examples
But thats just the case
The way humans do it
well i'm not really sure how to show you how institutions trade more than individuals, no real research on that
but i think the best way is to look at the ownership of top companies
apple is a bit over 60%, amazon, is around 60%, alphabet is 70, netflix is over 70, facebook is over 70
the vast majority of companies are owned by institutions such as those banks i mentioned before, individuals are usually only a few percent of total holders
Trade ?
malinvestment is generated by excessive and unsustainable credit expansion to businesses and individual borrowers by the banks.
that’s my point
All due to central banks lowering interest rates and increasing money supply
percentile is a cool word
I suppose so
Imagine being conservative
🤔
Imagine thinking that just because someone has more than you that they owe you some of it
@Leo (BillNyeLand) the problem is you think wealth is distributed but it’s earned
if I worked for that extra cake then I deserve it
well again, I wasn't referring to individual ownership of stock
most companies are owned by institutions who take money from the fed
it's this investment that allows these companies to grow
They take investments
yeah of course i mean borrow
the 0% interest rates enourages this lending practice
Cheaper than borrowing from the banks ¯\_(ツ)_/¯