Comments on: Low Interest Rates Funnel Money To The Rich, Shows Central Bank Research

By: TM

TM — Thu, 03 Jun 2021 00:16:58 +0000

Ummm – this completely misrepresents the paper. Yes, the paper found that low interest rates increase the wealth of the top 1%. But it also found that raising interest rates, while reducing the wealth of the top 1%, 0.1%, 0.01%, increases inequality overall, and funnels wealth to the top 2% – 9% of society.

“First, a positive interest rate shock reduces the shares of national income held by the top 1, 0.1 and 0.01 per cent, while its effect on the bottom 9 per cent of the top decile (which mainly consists of highly salaried workers) is positive. Second, monetary tightening increases the Gini index, meaning that the drop in the top percentile shares is likely to be smaller than the decline in the bottom income shares.”

A cursory look @ history (going back to Volcker times) seems to show that is indeed the case.

By: Dave

Dave — Wed, 02 Jun 2021 20:40:42 +0000

In reply to Trader Jim. I have, every day I hear poorly pitched charades, problem is, their widely accepted. If it works, why change it. Ah, the question is, who's gonna change it and who is it working for? I rest me case!

By: Smaug

Smaug — Wed, 02 Jun 2021 18:25:15 +0000

In reply to RW. I suggest an 84 month finance term at 0% for a bottle of Vitamin D. Why can we finance cars and houses but not vitamins that keep us healthy? IS THERE NO JUSTICE IN THIS WORLD????

By: RW

RW — Wed, 02 Jun 2021 17:50:59 +0000

In reply to LT. Store beside me was out of vitamin D. Can we double cut interest rates, so I can buy some extra gas money? The Hurcan only gets 12 mpg.

By: Trader Jim

Trader Jim — Wed, 02 Jun 2021 17:49:21 +0000

Jokes aside, cheap capital is great if you know what to do with it. The problem is central banks have the situation in reverse. It’s not about growing the economy, it’s about ensuring the right amount of inflation is produced.

Even if it’s the right amount of inflation, you have no idea where it’s coming from. Gasoline could spike 50% and make enough inflation. Mission accomplished? I’ve never seen such a poorly pitched charade that’s widely accepted.

By: Ahmed

Ahmed — Wed, 02 Jun 2021 17:46:13 +0000

You mean the guys in charge of ensuring the banks have unhindered access to money have lied to us?

This can’t be. My world is shattered. Does anyone want a loan?

By: LT

LT — Wed, 02 Jun 2021 17:44:11 +0000

In reply to Trader Jim. Kind of gloomy in Toronto. Can we cut interest rates so people can buy some vitamin D?

By: Trader Jim

Trader Jim — Wed, 02 Jun 2021 17:41:16 +0000

I felt uncomfortable learning this. I think we should cut interest rates, so we can all feel a little more relief.