|
|
|
|
|
|
by StopHammoTime
1403 days ago
|
|
|
That is the whole point of “printing money”. It takes value away from the money in bank accounts. It is used to forcibly redistribute money into the economy during a down turn when people would rather not spend it. If you have 100 “pie tokens” and then create an extra 900, there’s still only a single pie to go around. Of course this targets middle class and poor people because the rich don’t keep money in a bank, they keep it in assets. At least, not enough to materially affect them. |
|
|
This is a classic internet myth. The rich have more of everything. They have more houses, more cars, more yachts, more stocks, more bonds and obviously more money.
The idea that the wealthy exclusively hold assets is such an obvious lie, first of all, the rich keep 10% of their wealth in liquid assets that means money as a general rule of thumb for the sake of speculation. Second, as interest rates go below liquidity preference but at least zero, people start holding a bigger and bigger portion of their wealth in liquid assets. During the pandemic 40% or more of the money held at banks was in demand deposits, aka checking accounts, hundreds of billions of liquidity, enough to basically make any bank insolvent with the snap of a finger, hence the need for excessive amounts of QE even though banks don't want to lend out any more money.
For some strange reason people parrot this and then think that the poor have all the money despite the fact that most of them are in debt and most rich people have millions or hundreds of millions in their bank accounts and even more in assets. When you argue for a negative interest rate, people are going to shout how this ruins poor people because they don't have any stocks and most of their savings are held liquid when that is completely wrong, most poor people's wealth is their own body and the income it lets them derive from work, which is almost entirely illiquid. What poor people actually need is an opportunity to use their most prized asset and a negative interest rate doesn't harm them in any shape or form. It is only the rich that keep millions in checking accounts that really feel the pain.