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Central banks create inequality by artifically lowering interest rates house prices has increased due to lowering cost of mortages. Lower mortage price means hi
by acd 5y ago
Central banks create inequality by artifically lowering interest rates house prices has increased due to lowering cost of mortages. Lower mortage price means higher asset prices. Higher house prices makes it hard for younger generations to buy an appartment.
Secondly central banks try and keep inflation around 2% by lowering interest rate will drive wage inflation. Except that central banks cannot control prices and wage inflation by locally controlling interest rate in a globalized economy. So the fundamental system control principle of central banks are broken.
- imtringued 5y ago>Central banks create inequality by artifically lowering interest rates house prices has increased due to lowering cost of mortages. Why is it the central bank's fault that property sellers are ripping you off? You can take that mortgage and use it to buy a cheaper house somewhere else. The central bank didn't make houses more expensive, people with monopoly pricing power simply take more out of your wallet.
- radycov 5y agoYou're arguing either in bad faith or completely devoid of reality. Lower mortgage rates allow existing property owners to pay off cheap houses and further expand portfolios, affecting supply. Meanwhile, zero property owners need to amass increasingly large deposit/downpayment as banks limit lending to a salary multiplier. This is really basic stuff.