3 ms·

> you'd still want to borrow money. For sure, but you'd be met with market rates that tame your desire for money now. Buying a car on credit is a lot less temp

> you'd still want to borrow money. For sure, but you'd be met with market rates that tame your desire for money now. Buying a car on credit is a lot less tempting at 20% interest than 4%. Right now used car prices are going up and it's easy to get low interest financing. Used cars are not supposed to go up in value. It's madness. > But once they do normalize, why do you expect asset price inflation to continue? I expect asset prices to continue to inflate as long as we continue with our current monetary policies. I expect us to continue with our current monetary polices because the US would be unable to service its debts in about decade otherwise.

vkou 5y ago
> Used cars are not supposed to go up in value. That's due to a demand spike and supply shortage. Blame bitcoin and video games and people not wanting to take public transit in the middle of a global pandemic. It's not because of monetary policy, or because Scrooge McDuck borrowed a trillion dollars for free to buy up a bunch of used cars, or because GOOGL doubled in value in two years. > I expect asset prices to continue to inflate as long as we continue with our current monetary policies. Why? If it didn't make sense to invest money at a P/E ratio of X at a Y%-for-you interest rate, why would you invest money at a P/E ratio worse than ~2X, at a Y/2%-for-you interest rate? I get that the process of going from X to ~2X is painful, but why wouldn't it stop there?