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As if screwing our buying power through inflation wasn't bad enough: now we get higher interests rates? Are they trying to crash things?
by mikece 5y ago
As if screwing our buying power through inflation wasn't bad enough: now we get higher interests rates? Are they trying to crash things?
- uejfiweun 5y agoI feel like a crash would be a good thing for workers though? I mean pretty much nobody will ever be able to buy a house unless there's a major asset price crash.
- xxpor 5y agoSure, if your only expense in life is buying a house.
- quantified 5y agoIf it’s not the biggest, you have attained a measure of wealth, good on you.
- xxpor 5y agoPractically speaking for most people, the effect that buying a home has is replacing their rent payment with a monthly mortgage payment. While it's still probably the single largest payment made in a month, it's (hopefully) not a majority of your income, or even spending. Plenty of folks pay more for say, child care now.
- quantified 5y agoPer month, perhaps. Over 30 years? Everyone’s got their own equations, if I paid for the house all cash, of course. If I have one kid, and only 10% down on a $2mm house, gotta really pamper the kid to catch up
- xxpor 5y agoUnironically yes. But the point is the crash will bring down inflation. Some bank last week estimated that to get to 2% inflation would require 10% unemployment though. I'm skeptical of Phillips curve arguments, but even if that's remotely true it would be a complete disaster.
- tylerhou 5y agoHigher interest rates reduce the money supply and generally slow inflation. So if you don't like inflation, you should support higher interest rates.