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Aren't dollars and assets fundamentally different things? Land would keep up with inflation, while dollars wouldn't for example.
by briefcomment 5y ago
Aren't dollars and assets fundamentally different things? Land would keep up with inflation, while dollars wouldn't for example.
- H8crilA 5y ago> financial assets Also, many real assets are very dependent on real rates, for example real estate or gold. Imagine the mortgage rate tripling from today's levels (definitely possible), what do you think this will do to prices? I.e. what would happen if all mortgage payments increased 3x for new mortgages? With gold the story is actually similar, because gold is like an very long duration ultra high quality bond.
- omalleyt 5y agoReal rates become more negative with inflation though. US can’t afford high real rates, debt is 130% of GDP and Social Security is unfunded by $35T
- H8crilA 5y agoThis could actually happen (deep negative real rates), but by no means is guaranteed. There are far, far more indebted large governments out there. If it happens yeah pretty likely getting real estate and preferably on mortgage will do splendidly.