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by flagrant_taco 1073 days ago
There are all kinds of reasons for professional investors to be in a position when they need an investment to double in the short term. Sometimes thats greed, other times it's to cover existing bets that are losing and could cause their entire fund to collapse.

Say, for example, a certain bank where to listen to the Fed and invest massive piles of cash deposited after currency debasement into federal notes and bonds. If those notes where purchased when the story was interest would remain zero only to face 4-6% interest months later, the investor could well need a quick win to dig out from those now toxic assets that can't be sold at face value.

2 comments

So I understand there is a lot of nuance in this space, but:

> other times it's to cover existing bets

This is my issue. Our economy has become a casino for these professional investment firms with lots of capital to try to strike it rich. This is not a healthy way to run a system that determines who lives or dies in a big picture sense.

The economy has become a game for people with connections. It no longer matters if a business is healthy or profitable, if it does not work within this grand casino. The search for constant growth is killing us all.

Well I completely agree here, constant steady growth is a terrible, unsustainable model. There's no way around it, eventually we'll either fail or have to adjust course and give up on this idea that we can continue to consume more raw materials to create a steady growth of output value.
You will still get the interest and money back from lower rate bounds. They only drop in value if you need to sell them before they mature.
Right, the example I was attempting to give was a scenario where a professional investor may legitimately need to have a quick windfall from am investment. They couldn't sell their bonds that are currently worth less than they paid for them so the investor may legitimately need another investment to double their money.