Investment too many money, is it good or bad for investor and investment target?
Background
If some investors invest 1 trillion dollars to investment target, they will expect some returns.
Is this good or bad?
The answer will depend on the investors and the target.
When the returns is 5% yield, the target pays 50 billon dollars for 1 trillion dollars debt.
Lender’s logic and Borrower’s logic
Lender will think that borrower has to pay the return because lender took risk.
Borrower will think that lender is bad because lender lend money than borrower can pay back.
(Of course, this is not my story. I don’t have a debt.)
Japan gov and US gov
Japan gov lend money to US gov as to buy government bond.
Does Japan gov take risk?
I think it’s NO.
They borrow money from Japanese people and they lend money to US gov.
If lender don’t take risk, who does take the risk?
Japanese people…
Over lending
Further, I think over lending have to be ruled.
Over lending may cause over expecting to pay return to young people when the debt is gov’s.
I don’t want young people to feel over expectation.
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