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I believe what you're describing is an anomaly from a decade+ of negative real interest rates due to quantitative easing. Getting rich while failing upwards in
by acchow 4y ago
I believe what you're describing is an anomaly from a decade+ of negative real interest rates due to quantitative easing. Getting rich while failing upwards in the future will be an exceptional rarity.
- bryanlarsen 4y agoReal interest rates are lower today than they have been for the last few decades. 4.5% interest with 6.5% inflation is lower than anything we've had in the period of 1.5% - 2% inflation.
- acchow 4y agoYou are using backwards-looking inflation figures and comparing against forward yields. If you believe that the Feb 2024 price level will be 6.5% inflated compared to Feb 2023, then please go ahead and take that 4.5% loan. The rest of the market believes that inflation will continue to fall and infinite money has ended. Basically, if you borrow at 4.5% today with the assumption that it is effectively a negative real rate, you will be pretty disappointed in a year.