The irony is that low interest rates tend to centralize your economy into the hands of the banking cartel. What low fed interest rates mean in terms of mechanics is essentially printing money and handing it to the major banks for free. With that extra money, they can give us cheaper loans. But the effect of having given them free money still centralizes the ownership of all capital to them, even if indirectly through a loan. This is why the banks own everything now. In the 1970s, that wasn't true. They had to borrow from you and pay you interest to be able to make their loans. Now they just own everything and rent it to us. Giving them free money for decades is what did that.
Now someone will probably say, "It's not giving them free money; they have to pay it back." I'll say two things. The NPV (net present value) of that money is worth a lot more going out than coming back. In bankers' terms, that's free money. Second is that when they pay the money back, you are shrinking the money supply, which has the opposite effect, which in our addiction we don't want to do. So once you send it out to them, it's basically theirs, or you've set up a revolving loan, so on paper, it looks like they are paying it back, but in reality, they are going to hold onto that money forever once you give it to them.
Also, FYI, low interest rates are driving over speculation in AI and funding the R&D that will doom humanity. The economy is not financial numbers. It's how well people are doing. If we get fucked by AI but AI agents managing investment choose to speculate the stock market high, that's not a good economy. Low interest rates don't improve the health of the economy where it counts. It just invites more insanity, which looks good on the stock market. It's time for our society to get grounded. And that's what non-interference with interest rates is. Heck, I'd even welcome a crash. If a financial crash wipes out AI, then it's what we need.
Also FYI, the Fed printing and handing free money to major banks and terming it "low interest rates" to make it sound like a good thing, is not "returning to the orginal economic model that this nation was founded on," like the talking head says. That makes zero sense. I don't know who RJ Talks is, but he doesn't seem to know what he's talking about. Almost none of his responses made any sense. He is the Adam Sandler of financial news.
Low interest rates don't improve the health of the economy where it counts. It just invites more insanity, which looks good on the stock market. It's time for our society to get grounded.
I have a cousin in Toronto. She sold her $180k house. (What she paid for it 2010ish, was literally under a highway but was still pretty nice. She had it paid off.) She got ~$600k in 2016. Then she took that money and used it as a down payment to build a $1.4M home... Probably spent another $100k on furnishing and finishing.
When interest rates spiked she nearly lost the house. It took everything she, her husband, and both her parents and his parents contributing to make the payment.
Things have settled somewhat since the rates receded but she it house poor now. If rates head north again I don't know how long they could keep this house of cards going.
What you said could not be more true. Insanity is what this invites.
Right. And when you need to use interest rates to steer the economy you are pulling a lever that hugely impacts an investment that average people are over invested in. Literally we have normal people who aren't investors engaging in a leveraged investment that is tied to arbitary fed decisions. It's so bad. Depending on what side of these wild swings they buy and sell they can end up with ruin or undue wealth. It makes the economy a joke. None of these properties should be that expensive to begin with. It makes housing unaffordable. And the bankers have put normal people in front of them to catch the bullet if we ever try to fix the policy.
The downside of what I'm proposing is that a lot of folks have bought overvalued homes, and it would ruin them. But the houses should have never been overvalued to begin with. So now we have to keep giving banks free money forever or we send a lot of people who were just "doing what they are supposed to with their money" to the poor house. "I was told I'm supposed to invest in a home." You were told to make a leveraged investment with all the money you have into something with a history of large swings? That doesn't sound right.
Log in
Epstein is a distraction from much worse things coming down the bankster pipe.
The irony is that low interest rates tend to centralize your economy into the hands of the banking cartel. What low fed interest rates mean in terms of mechanics is essentially printing money and handing it to the major banks for free. With that extra money, they can give us cheaper loans. But the effect of having given them free money still centralizes the ownership of all capital to them, even if indirectly through a loan. This is why the banks own everything now. In the 1970s, that wasn't true. They had to borrow from you and pay you interest to be able to make their loans. Now they just own everything and rent it to us. Giving them free money for decades is what did that.
Now someone will probably say, "It's not giving them free money; they have to pay it back." I'll say two things. The NPV (net present value) of that money is worth a lot more going out than coming back. In bankers' terms, that's free money. Second is that when they pay the money back, you are shrinking the money supply, which has the opposite effect, which in our addiction we don't want to do. So once you send it out to them, it's basically theirs, or you've set up a revolving loan, so on paper, it looks like they are paying it back, but in reality, they are going to hold onto that money forever once you give it to them.
Also, FYI, low interest rates are driving over speculation in AI and funding the R&D that will doom humanity. The economy is not financial numbers. It's how well people are doing. If we get fucked by AI but AI agents managing investment choose to speculate the stock market high, that's not a good economy. Low interest rates don't improve the health of the economy where it counts. It just invites more insanity, which looks good on the stock market. It's time for our society to get grounded. And that's what non-interference with interest rates is. Heck, I'd even welcome a crash. If a financial crash wipes out AI, then it's what we need.
Also FYI, the Fed printing and handing free money to major banks and terming it "low interest rates" to make it sound like a good thing, is not "returning to the orginal economic model that this nation was founded on," like the talking head says. That makes zero sense. I don't know who RJ Talks is, but he doesn't seem to know what he's talking about. Almost none of his responses made any sense. He is the Adam Sandler of financial news.
Are we fucked or are we proper fucked?
I have a cousin in Toronto. She sold her $180k house. (What she paid for it 2010ish, was literally under a highway but was still pretty nice. She had it paid off.) She got ~$600k in 2016. Then she took that money and used it as a down payment to build a $1.4M home... Probably spent another $100k on furnishing and finishing.
When interest rates spiked she nearly lost the house. It took everything she, her husband, and both her parents and his parents contributing to make the payment.
Things have settled somewhat since the rates receded but she it house poor now. If rates head north again I don't know how long they could keep this house of cards going.
What you said could not be more true. Insanity is what this invites.
IMO she should get out while she can - move to the country, be grateful to be ahead of most.
Right. And when you need to use interest rates to steer the economy you are pulling a lever that hugely impacts an investment that average people are over invested in. Literally we have normal people who aren't investors engaging in a leveraged investment that is tied to arbitary fed decisions. It's so bad. Depending on what side of these wild swings they buy and sell they can end up with ruin or undue wealth. It makes the economy a joke. None of these properties should be that expensive to begin with. It makes housing unaffordable. And the bankers have put normal people in front of them to catch the bullet if we ever try to fix the policy.
The downside of what I'm proposing is that a lot of folks have bought overvalued homes, and it would ruin them. But the houses should have never been overvalued to begin with. So now we have to keep giving banks free money forever or we send a lot of people who were just "doing what they are supposed to with their money" to the poor house. "I was told I'm supposed to invest in a home." You were told to make a leveraged investment with all the money you have into something with a history of large swings? That doesn't sound right.