Hi Allison, I don't have an issue with stock buybacks per se, but if a CEO can't figure out how to deploy profits to grow the business, why are they being paid 350x the median worker's salary?

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Feb 26·edited Feb 26

Re: Interest rates. History has shown that around 3%-6% is pretty normal for interest rates (e.g. Bank of England rate and consols since early 1700s and US interest rates since 1800). Lower interest rates for more than a few months mean everything is fabulous with no inflation (e.g. England 1890s) or very bad, such as depression or war. High inflation occurs occasionally and drives interest rates up to high single digits or higher (leaving out hyperinflation episodes but looking at "normal" inflationary cycles like in UK and USA in 1970s).

We need to understand that ZIRP is not a right, but an experiment tried out by central banks over the past 15 years. Worked for a while, and then stopped working. Covid had put ZIRP on steroids and delayed the return to normal interest rates that started in 2018. Another experimental wild card is the unwinding of the Fed balance sheet that started middle of 2022. I think we are going back to "normal" interest rates for the next decade unless inflation stays high. We made sure we refinanced our mortgage at sub 3% rate in 2021 Q2 - I didn't see that opportunity recurring again for quite a while.

A major problem in modern finance and economics is that it is structured around post WW II conditions, as much as due to ready access to good data as recency bias. But the story of geopolitics and its impact on economies is usually told on cycles that are much longer than a handful of decades. It generally takes a couple of centuries or more for empires etc. to go through a cycle. So extrapolating the next 20-50 years based on post-WW II data and conditions is ignoring a lot of valuable historic data and trends and leaves out potential alternate story lines.

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