Where Will All the Money Go?
By Mark Thornton
> The Federal Reserve seems to have finally committed to, but has not yet begun its “rate cutting cycle” of lower interest rates.
> If the Fed lowers rates, what will happen to all that money? Here are most of the alternatives:
1. Part will stay right where it is in various forms of cash and demand deposits.
2. Part might be invested in stocks and longer-term bond investments, but which ones?
3. Part might be used to pay off or pay down debts at higher interest rates, such as credit card debt, mortgages, personal loans, etc. and businesses might do the same.
4. Part could be spent or consumed, or even invested in new businesses.
5. Part could be converted to alternative or defunct forms of money such as Bitcoin or the metal silver (Ag) which previously and widely served as money.
6. Part could be sent overseas to stock markets, bond markets, or foreign currency deposits. This type of flow would be influenced by foreign exchange rates, where the dollar has been falling lately.
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