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But this is the issue with zero interest rates. There is no incentive to save, but alternatively, it also pushes interest rates on mortgages to near zero which
by raiyu 6y ago
But this is the issue with zero interest rates.
There is no incentive to save, but alternatively, it also pushes interest rates on mortgages to near zero which increases the demand side by opening up home ownership to people that before couldn't afford it which pushes up prices.
The same occurs with stocks, with no returns in other asset classes everyone floods in to stocks and pushes the prices higher.
This is definitely the new normal going forward, because you can't increase interest rates without dramatically reducing purchasing power, which in turn leads to slow down across many areas of the market.
- peteradio 6y agoMaybe investment in real but non-liquid assets would make sense. If stocks are bogus valued then the real money would be "in-the-know" asset purchases. Personally I am trying to get what I see is under-valued unique rural property in a locale favored by an apparently changing climate.
- fzzzy 6y agoBetter act fast, the rural property markets are on fire. Where I grew up I can always remember hundreds of for sale signs as long as I lived here because there just weren't any jobs. Now, everything sold last fall. It's unprecedented.
- Apocryphon 6y agoWhat do the property owners plan on doing with that land if there aren't any jobs? Or are there jobs there now?
- SpaceRaccoon 6y agoRemote work is my guess.
- bergie 6y agoThanks to COVID there are now jobs everywhere where there is an Internet connection