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> Lending at 14% when [...] inflation is 18% In the US, inflation is nearly at 7%, while savings accounts yield around 0.05%. Doesn't that mean Americans are d
by jbay808 5y ago
> Lending at 14% when [...] inflation is 18%
In the US, inflation is nearly at 7%, while savings accounts yield around 0.05%. Doesn't that mean Americans are discouraged from keeping money in savings accounts about the same amount as Turks are?
- JumpCrisscross 5y ago> Doesn't that mean Americans are discouraged from keeping money in savings accounts about the same amount as Turks are? If you believe American inflation will remain there, yes. Few do. (Also, the Fed is tightening.)
- lumost 5y agoQuite possible that the US is going down the same route Turkey is. The US has an entrenched financial system that might take an extra 6 months to enter a crises. The current belief is that the fed will manage inflation appropriately, and that the 7% headline number will vanish in a few months. Housing increasing 20% last year is a sign that the same incentive is there, getting a mortgage at 2% and then earning a free 5% interest is too good a deal to pass up.
- skybrian 5y agoYes, it is discouraging. This is a reason why fixed income investments are quite unattractive right now. But there is a lag. After many years of low inflation many people haven’t changed habits yet. We still don’t expect that much inflation.