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by internetslave
1862 days ago
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It’s not at that point yet, but now more than ever as a hard working professional you are carrying others on your back. Massively inflating asset prices are like stealing money out of your pocket if you aren’t fully invested and leveraged. If the shame of living on welfare ever disappear, and safe poor neighborhoods are in high supply, watch men drop out. It’s already happening among millennials |
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Spend it, which creates new jobs.
Invest it, so businesses can create new jobs.
Lend it, so borrowers can spend it on your behalf.
Do nothing and let people stay unemployed.
Considering the lack of demand for credit indicated by low interest rates, lending is almost the same as doing nothing.
The last option causes deflation which requires the Fed to step in and increase the money supply until inflation hits the target inflation rate of 2%. Right now it is around 2.6% which is pretty much as perfect as it gets. Not too low, not too high.
Highly simplified: People are stealing USD and the Fed has to compensate for the loss except the Fed is distributing the new money very inefficiently which causes collateral damage in the asset markets.