I remember when mortgage rate were pushing 18%. I actually have held a 12% mortgage on my crappy $50K house in the 80s. So, we have had artificially low rates for the past 20 years or so. It encourages debt, which is the idea. No one else in the world borrows money like Americans do. It is such a conrundum.
Low interest rates -- below the rate of inflation -- give the rich free money, with which they push up asset prices such as real estate, which puts them out of reach for the less rich. On the other hand if the rich can't get free money they get depressed and we have a depression.
There's more to it than just assets being out of reach for the less rich though. Example: The US money supply spiked by almost a factor of 5 right around 2010 according to St. Louis Fed. (After being relatively constant for almost a century.) Now look at NFL team valuations around the same time: they are starkly correlated. So it really is an explicit wealth transfer.
Daniel, interest rates should have gone up long ago. The alternative is sacrificing The Dollar which makes the short-term pain look like Utopia. I suggest you study Austrian Economics, look at Dr. Ron Paul’s predictions over the years, and generally get your head out of your ass and quit trying to have your cake and eat it too. Economic Law is demanding recompense for decades of terrible policy. There is no soft-landing anyone convincing you otherwise is a snake oil salesman.
I remember when mortgage rate were pushing 18%. I actually have held a 12% mortgage on my crappy $50K house in the 80s. So, we have had artificially low rates for the past 20 years or so. It encourages debt, which is the idea. No one else in the world borrows money like Americans do. It is such a conrundum.
Low interest rates -- below the rate of inflation -- give the rich free money, with which they push up asset prices such as real estate, which puts them out of reach for the less rich. On the other hand if the rich can't get free money they get depressed and we have a depression.
BINGO!
There's more to it than just assets being out of reach for the less rich though. Example: The US money supply spiked by almost a factor of 5 right around 2010 according to St. Louis Fed. (After being relatively constant for almost a century.) Now look at NFL team valuations around the same time: they are starkly correlated. So it really is an explicit wealth transfer.
Nah. The human sacrifice occurred from 2008 - 2022 with rates at or near zero the whole time.
‘John Bull’, says someone, ‘can stand a great deal, but he cannot stand two per cent . .
-Walter Bagehot, London, 1852
Les plus ces change, etc. etc.
Daniel....don't quit your day job.
50 years ago we were a country of savers, a people of thrift, a culture of delayed gratification. Now we're Drunken Sailor Nation.
"Welcome, welcome to the USA.
We're partying fools in the Autumn of our hay day.
And though we're running out of everything, we can't afford to quit.
Until this gig is over, we're gonna squeeze out one more hit.
We're workin' it!"
- Don Henley
Why the two panels? Is there a joke I’m not getting?
Something about inflation past the cut off, maybe.
Does this cartoon reflect the opinion of Daniel only or Racket as an organization?
Keep those coming, would you? Xox
Daniel, interest rates should have gone up long ago. The alternative is sacrificing The Dollar which makes the short-term pain look like Utopia. I suggest you study Austrian Economics, look at Dr. Ron Paul’s predictions over the years, and generally get your head out of your ass and quit trying to have your cake and eat it too. Economic Law is demanding recompense for decades of terrible policy. There is no soft-landing anyone convincing you otherwise is a snake oil salesman.