[Exuma]

So this is more along the lines of what I was thinking, where borrowed money had higher interest, but many other replies in this thread make it seem like because treasury bills are better people are just investing in that instead.

Is it both of these factors combined? Is it more one factor than the other?

[iaw]

Based on your comment I think you may be missing one aspect:

The money you get lent at the bank is the money people are investing.

Both of the things you describe in this comment are two halves of a market. There's someone borrowing money and someone lending money. The borrowing becomes more expensive because the lender has better alternatives.

[Exuma]

Ahhh, do you know what's funny is after I wrote that comment I went to the bathroom and while peeing I basically had the intuition they were 2 halves of the same thing, but I couldn't even articulate it. I was going to come back and try to ask again and I saw this comment. Thanks!

All this stuff I've tried to learn a few times and it's just so open ended, my mind is very more technically oriented and vague hand-waving statements on investopedia drives me crazy. Other people seem to understand it so easily but after the multiple attempts that I have made, I just have given up.

[iaw]

Read "A Random Walk Down Wall Street" by Burton Malkiel

It's the best non-biased primer I've found on finance.

[Exuma]

Thanks! I just ordered it.