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Debt is given for student loans, and education has never been more expensive. Cheap debt is given for housing with a mere 10% down becoming quite common, and h
by etr-strike 9y ago
Debt is given for student loans, and education has never been more expensive.
Cheap debt is given for housing with a mere 10% down becoming quite common, and housing has never been more expensive.
Debt is being used by companies to buy back stocks, and stocks have never been more expensive.
Loans are being given at 0% interest to buy cars, and cars have never been more expensive.
Banks only loan money for the above things because they are backed by, in the banks opinion, collateral.
Which banks are loaning money to buy bitcoin? My position is the amount of debt being used to purchase bitcoin is very small relative to the rest of the economy.
- TimJYoung 9y agoThe effect of cheap money on Bitcoin is a second-order effect whereby people have access to money they wouldn't otherwise have, due to additional debt. It's similar to the effect witnessed during the run-up to the 2008 meltdown where people were refinancing their homes and cashing out (on-paper) equity to use for propping up their lifestyle or buying more real estate. The point is that it is impossible to separate Bitcoin and it's fate from the greater economy. Cheap money fuels bubbles. Last time it was real estate, this time it looks like Bitcoin.
- etr-strike 9y agoSounds like you're arguing for another global financial crisis that isn't limited to cryptocurrencies.