12-31-2016, 07:39 PM
This is not the Fed's doing. The value of parking one's cash in fed reserves in order to earn an absolutely trivial return is surely a sign that there are no better places to park one's money, otherwise why would a mere fraction of a % return attract funds? The argument that this is somehow a critical component of the shortfall in investment seems to be nothing more than grasping at straws to somehow blame the Fed.
Nobody is going to get rich earning a fraction of a %, nominal, on reserves. This is not the behaviour of canny investors looking to rook the taxpayer, but terrified investors, looking for safety. If it isn't, then why were investors not parking their money in such quantities in banks for the 50 years prior? Interest rates were higher, not lower - even real interest rates, for most of the period.
This dog does not hunt, as Occhi would say.
-Jester
Nobody is going to get rich earning a fraction of a %, nominal, on reserves. This is not the behaviour of canny investors looking to rook the taxpayer, but terrified investors, looking for safety. If it isn't, then why were investors not parking their money in such quantities in banks for the 50 years prior? Interest rates were higher, not lower - even real interest rates, for most of the period.
This dog does not hunt, as Occhi would say.
-Jester