I don't see them leaving all of it. I do see them leaving enough to have collateral for a loan that they can live off for a long time. Heck, just the rate that is common for bump CDs right now is not too shabby and makes me regret not setting up a savings ladder sooner.
That said, your point about better performing assets is why I don't think they care about inflation, as my response to the other thread said. I also agree that the banks should be putting them to good use. Sadly, we have active evidence that the banks are not too good at that. They seem to think it means either credit cards for the masses (which, yes, pays well for the bank), or convincing everyone to refinance their homes. Neither of which feels that good to me.
Tech stocks have screwed this up by fucking up the idea of profit versus non-profit companies. Not paying out dividends to shareholders has made that a near meaningless distinction and made it so that living off changes in the market is all folks can do. That is, you cannot own stock in a company to get residuals while they make the world better for you.
So, to that end, how do you think the banks should be putting that money to work?
This comment describes a moral judgement about consumerism, and maybe that’s perfectly reasonable, but it doesn’t relate to issues around the productive use of capital.
Not what I meant, amusingly. I seriously meant it as a question of what you think they should do? Funding consumers is somewhat fine, as far as money making goes. But our rules are made to drive to outcomes we want. So, what do we want banks doing?
I don’t presume to know what’s best for other parties to do with their capital. I think the kind of central planning you’re alluding to only produces bad outcomes for everybody involved. My only point is that the risk of capital controlled by billionaires being withdrawn from productive use basically doesn’t exist.
I'm not aiming at Central planning any more than anyone else here. My question isn't a moral based one, either. I don't like credit cards for reasons, but I am not saying they should be outlawed, either. Same for mortgages.
My question is specifically what use do you want banks making of deposits? That is better than having active participation in investments?
That said, your point about better performing assets is why I don't think they care about inflation, as my response to the other thread said. I also agree that the banks should be putting them to good use. Sadly, we have active evidence that the banks are not too good at that. They seem to think it means either credit cards for the masses (which, yes, pays well for the bank), or convincing everyone to refinance their homes. Neither of which feels that good to me.
Tech stocks have screwed this up by fucking up the idea of profit versus non-profit companies. Not paying out dividends to shareholders has made that a near meaningless distinction and made it so that living off changes in the market is all folks can do. That is, you cannot own stock in a company to get residuals while they make the world better for you.
So, to that end, how do you think the banks should be putting that money to work?