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 Originally Posted by poop
Sorry, what? You think rich people put their extra money in a Natwest savings account?
Well if you're hinting at offshore banking then we're moving into the murky world of tax evasion, a form of corruption. f rich people are making legal savings and investments, that capital isn't sitting there doing nothing. If it's being lent to Swiss businesses, well ok then, we have money coming in from around the world, some is obviously going to leave. If we want to avoid money being invested in Switzerland or the Cayman Islands, we need better tax incentives.
Or buy more shares in BP? How does that stimulate the economy?
Well BP might be a dirty energy company but they are a major British company that contributes to the economy. They pay massive tax, create jobs and access resources. Without them we'd be buying more Russian gas. So people who invest in BP are doing you a solid.
Also, your idea that the banks are relying on people to invest in the banks to have money to lend is very 1800s. That's not how banks work. They're basically just moving numbers around in an excel sheet.
I'm not sure if you're right here or not, but the more a bank has in capital the more money it can lend. As I understand it, they can lend 10x their capital. They print money, then when the loan is repaid they basically burn money, having created a profit. Massively simplified and maybe wrong. I don't keep up to date with the nuances of modern banking.
Depends what they do with the money they can't spend.
More often than not it gets loaned. Nobody keeps billions stuffed under the mattress.
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