Collaborative Fund

The sibling comment's linked article answers this.

"If you put money in a checking account, regulators make banks set aside a cushion as reserves in case they get into trouble. But if you put money into a savings account, regulators tell banks they don’t have to reserve anything. The catch is that it’s only considered a savings account if the consumer is allowed to make no more than six withdrawals per month.

It’s worked that way for years.

But then Covid hit, and regulators realized that having trillions of dollars in savings accounts with limited withdrawals was a burden as 22 million people lost their jobs.

So last April the Fed changed the rules and eliminated the six-withdrawal limit on savings accounts. It wrote:

The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent. It was an obvious and nearly risk-free way to help people. Just let them have easier access to their savings.

But it changed the relationship between M1 and M2.

Savings accounts are measured in M2 and left out of M1. But once the six-withdrawal rule was removed, every savings account suddenly became, in the eyes of regulators and people who make these charts, a checking account.

So M1 exploded higher. Not…

Not implying anything regarding OPs comment other than perspectives is greatly influenced by where you come from.

From: https://collabfund.com/blog/immutable-truths-and-arguing-fools/

> This is so foreign to the world I know. But so is my world to them. I think they’re wrong, but they’d say the same to me. I’m sure I’m right; so are they. Often the reason debates arise is that you double down on your view after learning that opposing views exist.

> Here’s another.

> Former New York Times columnist David Pogue once did a story about harsh working conditions at Foxconn tech assembly factories in China. A reader sent him a response:

>> My aunt worked several years in what Americans call “sweat shops.” It was hard work. Long hours, “small” wage, “poor” working conditions. Do you know what my aunt did before she worked in one of these factories? She was a prostitute.

>> Circumstances of birth are unfortunately random, and she was born in a very rural region. Most jobs were agricultural and family owned, and most of the jobs were held by men. Women and young girls, because of lack of educational and economic opportunities, had to find other “employment.”

>> The idea of working in a “sweat shop” compared to that old lifestyle is an improvement, in my opinion. I know that my aunt would rather be “exploited” by an evil capitalist boss for a couple of dollars than have her body be exploited by several men for pennies.

>> That is why I am upset by many Americans’…

> This means all this akward conversations about why I don't spend money on stuff that I don't need just because some YouTubers want me to.

There's nothing awkward about the following advice in conversations:

> 1. There are two ways to use money. One is as a tool to live a better life. The other is as a yardstick of status to measure yourself against others. Many people aspire for the former but spend their life chasing the latter. […]

> 3. Spending money can buy happiness, but it’s often an indirect path. Money itself doesn’t buy happiness, but it can help you find independence and purpose – both key ingredients for a happier life if you cultivate them. A big, nice house might make you happier, but mostly because it makes it easier to have friends and family over, and the friends and family are actually what are making you happy. […]

> 6. Everyone can spend money in a way that will make them happier. But there is no universal formula on how to do it. The nice stuff that makes me happy might seem crazy to you, and vice versa. Debates over what kind of lifestyle you should live are often just people with different personalities talking over each other. Author Luke Burgis puts it another way: “After meeting our basic needs as creatures, we enter into the human universe of desire. And knowing what to want is much harder than knowing what to need.”

* https://collabfund.com/blog/my-new-book-the-art-of-spending-money/

*…

For those looking for some relatively light financial reading related to the question of "how does one escape this?":

Morgan Housel (a writer at the collab fund) has written about how cycles of boom and bust are inherent to markets.

https://collabfund.com/uploads/Collaborative%20Fund%20--%20The%20Reasonable%20Formation%20of%20Unreasonable%20Things2.pdf

The first section "1: The Inevitability of Insanity Among Sane People" is probably the most relevant, and a more summarized version is from Housel directly: https://collabfund.com/blog/the-laws-of-investing/

And another great level-headed financial writer Howard Marks has a great "memo" about how bull markets (sometimes read: bubbles) rhyme. Specifically the section "Optimistic Rationales, Super Stocks, and the New, New Thing".

https://www.brookfieldoaktree.com/sites/default/files/2023-01/Bull-Market-Rhymes.pdf

I can't find the exact quote, but I feel that one of them basically once said that you wouldn't really want a market to not have bubbles, if something didn't have the ebbs and flows that financial markets have, there wouldn't really be any room to find niches or to innovate because innovation requires risk, and risk inherently destabilizes any existing stability (re: the first article).

I never really thought of this seriously (or why) until reading that "Some Things I Think" post[0] was on here yesterday and a few were along the lines of that. Three that resonated with me about money:

“People like you more when you are working towards something, not when you have it.” - Drake

Net worth goes from $0 to $1 million: Ecstasy. Net worth goes from $10 million to $1 million: Despondency. Can we agree that all wealth is relative?

A lot of people like making money more than they enjoy having money. The change, not the accumulated amount, is the thrill.

The last one is the biggest mindfuck to me because I can relate to it so much. Every single online MMO I play I'm happy making tiny amounts of money and watching the balance go up. I don't care much for upgrading to bigger and better things or end-game content. I played this game called Tibia pretty seriously for a period of time and then got bored and was going to stop. There were a few months where the only thing I would do is log in, do about 6 daily quests I enjoyed doing that were dead easy, collect my 1000gp or however much it was and walk around town for a bit debating if I want to level up before quitting.

[0] https://collabfund.com/blog/thoughts/

It relates to how we learn. We have at least two modes of learning, experience [1] and, someone please suggest a better word, indoctrination. Take json in database as example, around mid 2010s, NoSQL databases were all the rage. Engineers starting their career at that era might think putting json in database is the default operation, after all that's what people say. On the other hand, seasoned relational database user might find it bonkers to put json into database. How would you ever join tables?

We make progress when we trust/indoctrinated by other people's work, including when the work doesn't work [2]. But we can hardly see other's point of view when what we experienced were different [3]

[1] https://collabfund.com/blog/you-have-to-live-it-to-believe-it/

[2] https://www.vox.com/future-perfect/368350/scientific-research-fraud-crime-jail-time

[3] https://en.wikipedia.org/wiki/Planck%27s_principle