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Prediction higher interest rates will reverse the following trends: * Private car leases at near zero interest rate will stop. At one point it was sometime che
by acd 4y ago
Prediction higher interest rates will reverse the following trends:
* Private car leases at near zero interest rate will stop. At one point it was sometime cheaper to lease than to buy a car for cash
* Housing bubble. Near zero central bank/bank interest rates has inflated a housing bubble. Higher interest rates will decrease housing prices since fewer buyers will be able to afford higher interest mortages.
* Tech bubble. Cheap interest has also funded some startups with non viable long term business ideas
* Electric scooter rental companies. There will be fewer electric scooters since the interest rate to lease them will be higher. Electric scooter rental companies will afford fewer scooters.
* Less investment companies buying up farmland. It will be more expensive to finance these deals
* High leverage tech stocks over schiller p/e 15 rate will deflate.
* There was no exponential startups growing forever. There was however debt growing an exponential rate. The world is still linear.
Linear power production.
* Graphic cards for gaming will be more available for gamers again. Reason crypto currency mining will decrease deflate by higher interest rate not flowing as much into crypto.
* Tech bubble less tech startups will effect cloud vendor footprint. Fewer tech startups less need to rent cloud services.
- scoofy 4y agoI generally agree with all of this, though, i think two of the points may see counter-intuitive outcomes: >* Housing bubble. Near zero central bank/bank interest rates has inflated a housing bubble. Higher interest rates will decrease housing prices since fewer buyers will be able to afford higher interest mortages. Ehh... we should expect this, but supply may meet demand, instead of the other way around. We could see an unprecedented ramp down in the already unprecedentedly low inventory. >* Less investment companies buying up farmland. It will be more expensive to finance these deals I would be skeptical of this. There will be fewer financed deals, but there are likely firms out there betting on these rate hikes failing, which still make farmland a safe bet against inflation.
- jgust 4y ago> Ehh... we should expect this, but supply may meet demand, instead of the other way around. We could see an unprecedented ramp down in the already unprecedentedly low inventory. This seems likely. As a hypothetical homeowner, I would have very little incentive to sell my house for less than I paid for it AND take the hit borrowing more expensive money unless there exists some external factor for me to move.
- wait_a_minute 4y ago“ We could see an unprecedented ramp down in the already unprecedentedly low inventory.” What do you mean by this?
- scoofy 4y agoRate lock-in homeowners refusing to sell because they're sustainable at current mortgage, but they'd be effectively underwater if they move. Thus, supply of housing declines to stabilize price because it matches stable demand.
- rootusrootus 4y agoWhy sell your house if it would mean giving up a <3% fixed rate mortgage and require you to pay a lot more interest on a new loan for a different home? Nobody is going to sell that doesn't have to, unless they've already paid off that mortgage and won't be getting one for the next house.