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Ask HN: How to prosper under negative interest rates?

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Re: Ask HN: How to prosper under negative interest rates?

#171

Post by dtnewman »

whycombagator wrote: post #32
dtnewman wrote: post #16

Earlier quoted context omitted.

> No. negative interest rates won't go that negative. Even if your bank is earning -1% interest, it still makes sense to be saving. A great way to lock in decent rates and still have the safety of a bank account is with CDs. See https://www.ally.com/bank/cd-rates/ for example, where you can get 1.45-1.55% guaranteed interest on an 18 month CD where you can pull your money out at any time without penalty. A month ago,…

The Ally no penalty CD offerings are 11 months only. Side note: Last year, at one point, they were 2.3%

My bad... I meant 11 months. Thanks for pointing that out. In any case, the overall point stands. At a minimum, most people would benefit from this kind of CD over the money sitting in a savings account. It gives you a low, but decent return while you wait to invest in the market (or other things).

Re: Ask HN: How to prosper under negative interest rates?

#172

Post by zemvpferreira »

wejowejfoiwejf wrote: post #124
chvid wrote: post #25

You don't build wealth by saving. You do it by investing using leverage. The system subsidises debt and risk-taking (within limits) by inflation and the structure of the tax system. You need to let go of the idea that it is immoral. Buy a house and when you can buy a bigger house. Put your money in the growth part of the stock market (technology ... big names like Apple and Amazon is good). Use your income to take on…

>You need to let go of the idea that it is immoral. >Buy a house and when you can buy a bigger house. Put your money in the growth part of the stock market (technology ... big names like Apple and Amazon is good). Your advice is sound, but I still argue that the system is extremely immoral. Consider what this mindset has done to the environment. The reality of Keynesianism is that by allowing the government to manipu…

Serfdom and slavery would like to have a word with you about inequality.

Re: Ask HN: How to prosper under negative interest rates?

#174

Post by chewz »

dnadler wrote: post #164
tomp wrote: post #153

Earlier quoted context omitted.

Good explanation. Also wrong. Denmark has a negative interest rate [1] but has had a (positive) inflation for a while [2]. [1] https://en.wikipedia.org/wiki/List_of_countries_by_central_b... [2] https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG?location...

This doesn't mean that the OP was wrong, but that the negative interest rate policy successfully prevented deflation.

Denmark does not use euro and their NIRP had more to do with keeping parity of krona to euro then fighting deflation.

Re: Ask HN: How to prosper under negative interest rates?

#176

Post by TheCoelacanth »

bwanab wrote: post #121
mancerayder wrote: post #88

Earlier quoted context omitted.

I just sold a home days before the pandemic hit, and consider myself very lucky. But now I have cash and I'm nervous inflation might start becoming a real problem. I'm also worried that dense American cities are going to have a huge drop in property values, desirability, and an increase in crime. I am seeing this right now, and a lot of sentiment from people with money is to never come back. It's a tough call. Is thi…

As a regular critic of many things and ideas American, I have to point out that in the long run, you’ve never been better off betting against America.

Could have said the same about Rome at some point.

Re: Ask HN: How to prosper under negative interest rates?

#177

Post by 1-more »

thehappypm wrote: post #170
1-more wrote: post #141

Earlier quoted context omitted.

At the end I get a condo and the renter gets nothing, that's just so backwards to me.

They get shelter.

Even taking as given that they should have to pay for shelter beyond the cost of maintenance, all that could all exist without me getting to skim in the middle.

Re: Ask HN: How to prosper under negative interest rates?

#178

Post by csomar »

thorwasdfasdf wrote: post #82
qeternity wrote: post #8

You have to look at real rates, not nominal rates. The only markets that have negative nominal rates are battling deflation (which the US is not) or have serious liquidity concerns at the moment. The Fed is unlikely to go negative as they face a very different beast. Here's a quick example. Let's say you're in a deflationary environment: in 1 year, your money actually buys you more than it did last year, let's say fo…

but we're not having deflation. With fewer and fewer people working, there's less and less supply with even larger demand, now that they're printing money like never before. As a result, we're going to get really really serious inflation of over 2%, 3%, maybe even more than 3%. It doesn't sound like much because we've become innured to it. But, it's really bad. Just think, you earned 100K in 1 year and 1 year later i…

> but we're not having deflation.

We are going to have deflation. The stock market already "deflated". Just wait for the rest. Food prices are going to go through the roof (and maybe medical procedures) but everything else is going to get cheaper.

Re: Ask HN: How to prosper under negative interest rates?

#179

Post by tathougies »

Ididntdothis wrote: post #52
ilikerashers wrote: post #37

Earlier quoted context omitted.

You're equating buying a house to buying a lottery ticket. These are opposite ends of the risk scale. These are not alike in any way.

Ten years ago a lot of people learned that housing is not as safe as they thought.

No. They learned that buying a house with ridiculous terms and unlimited downside is not as safe as they were deluded to believe. Even in 2008, most people paid their mortgages, and were fine, housing wise.

Re: Ask HN: How to prosper under negative interest rates?

#180

Post by tathougies »

bwanab wrote: post #117
tathougies wrote: post #76

Earlier quoted context omitted.

Cash equivalents include commercial paper and bonds. Cash equivalents are not the same as cash.

There’s a reason they’re called cash “equivalents”.

Um right, but commercial paper and bonds have interest rates, unlike normal cash. So while they're easily converted to cash, they do not suffer as badly from inflation.
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