Paying Pandemic Bills Requires Changes In Wealth Gap, Dalio Says
(3 minutes of audio)
https://www.npr.org/2020/04/16/83571002 ... dalio-says
Ray Dalio on Morning Edition, Apr16 2020
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dualstow
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Ray Dalio on Morning Edition, Apr16 2020
No money in our jackets and our jeans are torn/
your hands are cold but your lips are warm _ . /
your hands are cold but your lips are warm _ . /
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Mark Leavy
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Re: Ray Dalio on Morning Edition, Apr16 2020
Some interesting comments. Thanks for posting. I agree with Ray that the wealth gap is dangerous, but I didn't hear any convincing arguments as to what to do about it.
I recently read an argument that the wealth gap is (at least partly) a function of interest rates.
You Cannot Understand the Rise of Wealth Inequality Without Acknowledging the Role of Interest Rates
The author's argument (which I may not be doing justice) is that income producing assets respond to interest rate changes essentially the same way that bonds do. And for the same reason. With lower rates the assets increase in value, because they have a higher return on capital when compared to the risk free interest rate. And when the risk free rate rises, the income producing asset has less of an advantage and thus loses value. Wealthy people (who hold assets) see their wealth magnified as interest rates drop - increasing the wealth gap.
I recently read an argument that the wealth gap is (at least partly) a function of interest rates.
You Cannot Understand the Rise of Wealth Inequality Without Acknowledging the Role of Interest Rates
The author's argument (which I may not be doing justice) is that income producing assets respond to interest rate changes essentially the same way that bonds do. And for the same reason. With lower rates the assets increase in value, because they have a higher return on capital when compared to the risk free interest rate. And when the risk free rate rises, the income producing asset has less of an advantage and thus loses value. Wealthy people (who hold assets) see their wealth magnified as interest rates drop - increasing the wealth gap.