“Cheap borrowing advantages the borrower.”
Not really. The fact that money is cheap means that everybody has already borrowed on the real assets that you desire. Prices are inflated on houses not as a virtue of their productiveness, but because of available money. Paying 6% interest to borrow on a house that was worth 2 years of your income in 1950, has now transitioned into borrowing at 3% on a house that is worth 12 years of income. You’re paying far far more in interest because you’re playing with an asset class that is massively inflated because of those aggressive loans, because of the myth of necessary home ownership, because of the impossibility of bank default due to bailouts, and because of the belief that prices will always rise.
Aurelius
npub169…v2thg
2023-07-06 12:03:03
in reply to nevent1q…7w64
Author Public Key
npub169yu4d6xl8a6d4xvfyhstjdxr0cc7qtfq5pch5kwv4k2wkapa3pq8v2thgPublished at
2023-07-06 12:03:03Event JSON
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"content": "“Cheap borrowing advantages the borrower.”\n\nNot really. The fact that money is cheap means that everybody has already borrowed on the real assets that you desire. Prices are inflated on houses not as a virtue of their productiveness, but because of available money. Paying 6% interest to borrow on a house that was worth 2 years of your income in 1950, has now transitioned into borrowing at 3% on a house that is worth 12 years of income. You’re paying far far more in interest because you’re playing with an asset class that is massively inflated because of those aggressive loans, because of the myth of necessary home ownership, because of the impossibility of bank default due to bailouts, and because of the belief that prices will always rise.",
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