Was just trying to explain to someone why everything is going to shit, specifically companies, and realized, I don’t fully get it either.

I’ve got the following explanation. The sentences marked with “???” are were I’m lost. Anyone mind telling me, if they’re correct and if so, why?

The past few years, central banks were giving out interest rates of 0% or even negative percentages. Regular banks would not quite pass this on, but you could still loan money and give it back later with no real interest payments.

This lead to lots of people investing in companies. As long as those companies paid out more money than those low interest rates, it was worthwhile. But at the same time, this meant companies didn’t have to be profitable, because they could pay out investors from money that other investors gave them???

This has stopped being the case, as central banks are hiking interest rates again, to combat inflation???

  • aubertlone
    1•1 year ago

    Thank you for the nostalgia blast.

    I do remember loving odwalla, specifically the carrot juice. But this was more than a decade ago, when I was still in high school.

    Never remember them rebranding as naked juice. Although I do remember picking up naked juice on two separate occasions wondering how the taste would be. Two times was enough to learn the taste wasn’t worth the price.