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No mention of record-low interest rates on the 10Y and 30Y - held in place by a Fed terrified of erring on the downside. Officials swear it's not yield curve co
by aazaa 6y ago
No mention of record-low interest rates on the 10Y and 30Y - held in place by a Fed terrified of erring on the downside. Officials swear it's not yield curve control, but of course it is.
There's nothing magical going on. Housing purchases are made with debt. If you suppress the price of debt, you increase demand for houses.
Read some of the articles written about the real estate boom prior to 2008. They also left out the minor detail of panicked policy makers juicing the money supply.
- jdhn 6y agoI don't see this changing no matter who wins the White House in November. I used to laugh at people who said that the Fed was going to work at lowering interest rates as much as possible in order to promote economic growth and inflate away the debt. I'm not laughing at those people anymore.
- selectodude 6y agoWe've unofficially crossed the rubicon into basically what amounts to Modern Monetary Theory. It's going to be an interesting decade.
- eli_gottlieb 6y agoNah, before it becomes real MMT we have to actually keep up the trend of taking the cheap money and spending it fiscally, not just giving out cheap loans. Right now we've got the HEROES Act stalled in the Senate and the CARES Act has largely run out, so we're back to Great Recession era "haha money printer go brrr".
- cperciva 6y agoI'd go a step further and say that MMT is about borrowing for structural deficits. There's nothing MMT about Keynesian stimulus in 2008 or 2020; where things went off the rails was governments running large deficits during the boom years of 2015-2019 (when they should instead have been saving for 2020).
- jdhn 6y agoI would argue that we crossed that rubicon in 2008 with the bailouts, but I completely agree with you that it's going to be quite an interesting decade.
- claydavisss 6y agoJerome Powell is without a doubt the most powerful person in the world. Elected leaders may control nuclear weapons, but Powell controls a death star - and he fires it regularly. Even if Biden replaces Powell, the pool of acceptable replacements are all cut from the same cloth, and will continue piloting the death star until some rebel blows it up.