the financial parasites that have gotten used to getting free money from the government for so long.
Actually the government is giving out free money now as opposed to 0 interest rates where it wasn’t. The fed rate is the overnight rate you get for depositing money into the fed, not borrowing money from it. If I’m a bank and I have $1,000 at the end of the day and didn’t find anything to invest it in then I’ll deposit it at the fed and get say 5% apy as interest from the fed. If you did that every night for a year you’d get $50 from the fed while taking almost no risk, about as close to free as a capital gain can be called free. This has the effect of pushing up interest rates across the board because why would I invest in some risky business venture for 5% when I can get 5% with no risk from the government. The government is basically paying capital owners to not invest in riskier loans and bonds, cooling the market.
If you want to see financial parasites there are plenty of people right now with millions in Treasury bonds collecting even more interest from the government while doing nothing.
Don’t get me wrong their are plenty of parasites and con men that show up in the highly speculative world of 0% interest rates, *cough crypto *cough, but it’s not a matter of low interest rates good for capitalists and high interest rates bad.
Actually the government is giving out free money now as opposed to 0 interest rates where it wasn’t. The fed rate is the overnight rate you get for depositing money into the fed, not borrowing money from it. If I’m a bank and I have $1,000 at the end of the day and didn’t find anything to invest it in then I’ll deposit it at the fed and get say 5% apy as interest from the fed. If you did that every night for a year you’d get $50 from the fed while taking almost no risk, about as close to free as a capital gain can be called free. This has the effect of pushing up interest rates across the board because why would I invest in some risky business venture for 5% when I can get 5% with no risk from the government. The government is basically paying capital owners to not invest in riskier loans and bonds, cooling the market.
If you want to see financial parasites there are plenty of people right now with millions in Treasury bonds collecting even more interest from the government while doing nothing.
Don’t get me wrong their are plenty of parasites and con men that show up in the highly speculative world of 0% interest rates, *cough crypto *cough, but it’s not a matter of low interest rates good for capitalists and high interest rates bad.