Yes, The Federal Reserve has lent to banks since 2008 at a ~.15 interest rate. Banks then turn around and lend to you or business at a hire rate.
The reason that you are not getting interest on your bank account is because the banks don't want your money when they can get it from the federal reserves at cheap rates.
The federal reserves in 08 wanted consumers and business to spend money instead of keeping it in savings to spur the economy. (Let's not forget ~70% of GDP is consumer spending) Some will argue it has worked, others will argue it hasn't worked.
Snapchat is an example of an unintended consequences of very low interest rates.
I don't see what any part of this has to do with the VC economy and you have not elaborated. None of the $485M is coming from banks. VC's (the 23 investors) don't borrow money from banks to invest into Snapchat, and LP's (their investors) don't borrow money from banks to invest into the VC's. And anyway these funds were mostly raised years ago. So I just don't see even a third-level connection (which would add years to the effect becoming visible.) Snapchat isn't something everyday individuals or banks are investing in - these are investments by VC's with funds already set aside for this purpose. If there's a closer connection with low interest rates, you haven't made it clear to me.
Not sure if I can really explain a complicated economic system in a comment section.
Please feel free to invest however you see fit, if you think that VC, stock markets, interest rates, speculation, investments are not intertwined, best of luck.
Comments
Yes, The Federal Reserve has lent to banks since 2008 at a ~.15 interest rate. Banks then turn around and lend to you or business at a hire rate.
The reason that you are not getting interest on your bank account is because the banks don't want your money when they can get it from the federal reserves at cheap rates.
The federal reserves in 08 wanted consumers and business to spend money instead of keeping it in savings to spur the economy. (Let's not forget ~70% of GDP is consumer spending) Some will argue it has worked, others will argue it hasn't worked.
Snapchat is an example of an unintended consequences of very low interest rates.
http://en.wikipedia.org/wiki/Federal_Reserve_System
http://en.wikipedia.org/wiki/John_Maynard_Keynes
I don't see what any part of this has to do with the VC economy and you have not elaborated. None of the $485M is coming from banks. VC's (the 23 investors) don't borrow money from banks to invest into Snapchat, and LP's (their investors) don't borrow money from banks to invest into the VC's. And anyway these funds were mostly raised years ago. So I just don't see even a third-level connection (which would add years to the effect becoming visible.) Snapchat isn't something everyday individuals or banks are investing in - these are investments by VC's with funds already set aside for this purpose. If there's a closer connection with low interest rates, you haven't made it clear to me.
Not sure if I can really explain a complicated economic system in a comment section.
Please feel free to invest however you see fit, if you think that VC, stock markets, interest rates, speculation, investments are not intertwined, best of luck.
In the meantime I'll just leave this right here.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/07/22/j...