TwinTurbo.NET: Nissan 300ZX forum - I dont know how it works in Canada, but the Federal Reserve
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Subject I dont know how it works in Canada, but the Federal Reserve
     
Posted by LJZTT on May 21, 2019 at 6:12 PM
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In Reply To "accomodative" monetary policy... lol posted by vorpalZed on May 21, 2019 at 09:15 AM
     
Message is not the US government. It is a private bank. Accomodative monetary policy has nothing to do with government legislative/fiscal policy. I am not referring to government market distortions (aka subsidies).


The subsidies work to artificially boost demand, as they are in effect a de facto discount that makes the car available to more people based on how big the subsidy is, right?
Zero and near zero lending rates by the Federal Reserve, work to make lending cheaper....see how that can be advantageous to a company like Tesla who is attempting to borrow their way into market dominance.

It simply doesn't work that way in a non-command economy. You must deliver value for the consumer. Tesla doesn't do that, not to an extent that creates enough demand to stay out of the red ink, not yet anyway.

It is a huge problem. Because of all the debt, they cannot drop prices as much as necessary to boost sales #'s to the point of profitability....so they have to borrow more money, or somehow convince people to send them more cash (aka customer deposits), just to operate.

The financial analysis document I linked to does a very good job describing what ails Tesla financially right now. I would recommend actually reading it rather than the knee-jerk pro-this/anti-that tribalism.

The numbers don't lie. They are fucked.

30 years ago...or now?

"I torch my soul to show the world that I am pure deep inside my heart...."
--William Patrick Corgan

     
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