381–390 of 393 posts
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> If US prints money, the wealth of all countries holding USD goes down. While the wealth of US increases. True, yet average Americans lose out because their savings get eaten away by inflation
Real interest rates have been positive. Unless you were saving in a mattress, your purchasing power increased.
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https://en.wikipedia.org/wiki/Green_New_Deal > social aims like job creation and reducing economic inequality > the plan could cost between $51–$93 trillion over the next decade https://en.wikipedia.org/wiki/Build_Back_Better_Plan > the largest nationwide public investments in social > a variety of social policy initiatives > $1.9 trillion > $2.3 trillion (which, when combined with the American Families Plan, amounte…
Last I checked, neither plan ever passed. Nor would they have passed in time to make a difference for the issues raised in the article.
> Democrats could advocate multi-trillion social programs
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He literally said he wants to reclaim all lands of Russian empire not just USSR.
Laughable propaganda. Find me the video. And not the MSNBC interpretation on it. Putin didn’t even want to annex the eastern oblasts of Ukraine until very recently, after his hand was basically forced. It’s well-documented that he even told the representatives not to hold referendums on joining Russia prior to the most recent ones, when it became clear there was no other way to protect the Russian-speaking citizens t…
The folks reading this are going to get the wrong message. They are going to believe that rising interest rates will magically make it so that the most highly valued companies are the ones that produce the most societal good. This may start to happen more to a certain extent, but it's a totally false assumption. The most valuable companies before and after this era of low interest rates were and continue to be monopo…
I think a lot of HN adjacent engineers are going to have a rude shock over the next few years as there are several pressures working against them. The first is that companies that have been trading debt for growth are not sustainable in a high interest rate environment. The second is that the shift to working from home has meant that employing remote teams, be they in other areas of the states or overseas has become…
I definetly think a lot of the startup world view is just a function of low rates. Startups could run for decades with $billions in losses and only a passing focus on eventual profits. All of those losses flowed into the bank accounts of big tech (via AWS credits, Google and Facebook Ads). All of the high salaries, employee expectations and leverage in tech startups and big tech derive from that spigot of cheap money…
It has skewed the labor market to an insane degree. So much talent went into idiotic pursuits, and away from anything that had to do with public service.
If government actually wants talents it needs to be realistic about what the market is and take some money out of the insane amount it spends on contractors to pay accordingly. It also needs to build a culture that lets it hire well and lets it fire when it makes mistakes.
I suspect near-zero interest rates for a decade also contributed to the political realignment of affluent suburbs trending Democrat. So long as the Fed would buy federal debt cheaply and there was no significant inflation, Democrats could advocate multi-trillion social programs while promising to maintain Reagan-era tax rates on even quite affluent folks.
What multi-trillion dollar social programs? What country are you talking about— I want to live there, sounds a lot better than the pittance we have in the US. Unless you think the Defense Department is a social program.
I’m not knocking any of that. But American Democrats are probably the only center-left party in the developed world who advocates for expensive social programs while promising not to raise taxes on people making up to $400,000 a year. My point is that this is a unique outgrowth of the fed’s money printing machine.
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I think a lot of HN adjacent engineers are going to have a rude shock over the next few years as there are several pressures working against them. The first is that companies that have been trading debt for growth are not sustainable in a high interest rate environment. The second is that the shift to working from home has meant that employing remote teams, be they in other areas of the states or overseas has become…
As a software engineer a good part of my job is communication and having that communication come with an eight hour time zone shift would substantially impede the job. Yes you can hire remotely if people are working largely the same hours or hours with substantial overlap. Hiring from cheaper parts of the world across an entire ocean isn’t going to work for the same reason you can’t get hired for a day job and work a…
I've been saying this for the last 5 years. People don't realize how powerful the 'money printer' is. All the money which exists in the system was created out of nothing and injected into the economy through a few specific channels (mostly as credit backed by debt). IMO, everything in modern society is influenced in some way by interest rates; even culture and morality. Money printing can distort the market pricing m…
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Paying off loans is equivalent to saving! As long as you aren't taking on new debt to pay off the old one. > How many people do you know who pay off loans in the middle of an inflation? If interest rates are low, nobody. If they are high, lots. Go look at r/personalfinancecanada and there's been a huge shift from "taking out a line of credit at 2% when inflation is 6% is practically free money!" to "which should I re…
"If they are high, lots." And what do the aggregate numbers say, rather than the anecdotes from rich people? If you can't afford the heating then you don't pay down loans. You take out new ones.
You don't need me to do your research for you, but the data agrees with the theory. Canadians are paying down their at a record pace. Household debt payments rose to $57.4 billion in Q3, its highest ever.
https://www.theglobeandmail.com/business/economy/article-can...
On the flipside, household debt exploded after rates dropped to zero. I think that's very uncontroversial. So either you believe the conventional wisdom that low rates increase indebtedness and high rates decrease it, or... or you'd have to take one of these positions:
- every interest rate somehow stimulates borrowing
or
- there's one or more "goldilocks" interest rate that causes people to pay down debts but every other rate causes people to borrow.
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Wait, that's not how central bank lending works - you seem to equate "not setting a rate" with "setting a rate to 0" and offering limitless lending to commercial banks at that rate - which is a very high level of intervention IMHO; I'd rather equate "not setting a rate" by the central bank reducing its participation in the interbank lending and stopping this injection of 0-rate money, in which case the interbank lend…
That's exactly how central bank lending works. You have a fallacy of composition. In reality the central bank doesn't lend to banks. The banks lend to each other and they do arbitrarily 'create money' to do so. The commercial banks have accounts with each other. That's what interbank lending is, and what they clear to at the end of the day. In Bank A it is DR Bank B, CR Customer 2 Deposit. In Bank B it is DR Customer…
Central banks absolutely do lend to banks through discount window lending and other means.
> The commercial banks have accounts with each other. That's what interbank lending is, and what they clear to at the end of the day.
> In Bank A it is DR Bank B, CR Customer 2 Deposit. In Bank B it is DR Customer 1 Loan, CR Bank A. They can't clear interbank payments unless that happens.[1]
There is not a one true way to do interbank lending, since it depends on regulation and the underlying market infrastructure used - therefore it is not a fact that banks arbitrarily 'create money' to do so.
Banks can lend to each other using central counterparty clearing houses (CCP) as intermediates, in that case, Bank A and Bank B will have accounts with the CCP, who will do all the clearing & settlement.