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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?

#201

Post by viklove »

zemvpferreira wrote: post #172
wejowejfoiwejf wrote: post #124

Earlier quoted context omitted.

>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.

Please explain to me how wage-workers are different from serfs.

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

#202

Post by pjc50 »

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…

Blaming consumerism on Keynesianism rather than, say, advertising and the profit motive is a hell of a bizarre take.

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

#203

Post by pjc50 »

marcus_holmes wrote: post #70
mindslight wrote: post #45

Earlier quoted context omitted.

> Borrowing money to buy real estate and then collect income is a very common way to leverage your money. Over time that builds real wealth. My friend has bought 5 properties and is renting them all out This only "builds real wealth" for one person. For the larger system consisting of all 6 people, it's a net loss (the interest payments are still leaving, upwards). We've built a financial system where it is in everyb…

I used to own a house. Now I rent. The ability to walk away from the obligations that house-owning involve is worth a lot of money to me. I probably lose financially, maybe, but meanwhile I get to have a much better standard of living.

I'm rather surprised; the inabiilty to paint the walls or put up pictures or have pets? The knowledge that you might have to leave at short notice?

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

#204

Post by samsonradu »

viklove wrote: post #199
thorwasdfasdf wrote: post #82

Earlier quoted context omitted.

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…

There's less supply of what? We still have plenty of food, plenty of homes, plenty of water. Yeah, we have less Airbnbs getting booked, and Ubers being called, but does that really fucking matter? It only matters to the VCs who have invested in these companies. Americans don't need to buy their 6th iPhone to save this economy, we just need to focus on what's important. It's very telling of the state of current US pol…

There was this joke running on Twitter:

If aliens invaded us today our first reaction would be to lower interest rates.

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

#205

Post by pjc50 »

pgroves wrote: post #119

It's blowing my mind that I just did a ctrl-F for "compound interest" in this thread and got zero hits. It's not even part of the discussion any more.

Why? Perhaps we're just assuming we all know how it works. Or, at 2% to -0.5%, it really doesn't make a big difference.

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

#206

Post by chewz »

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…

> get really really serious inflation of over 2%, 3%, maybe even more than 3%

Really serious inflation is when prices in supermarket change twice a day like in Brasil in the old times. It is Weimar style hyperinflation where everyone want to get rid of paper money right away.

Inflation of 2-3% is actually desirable - it is a sign of healthy, growing economy. Additionaly it is good for public finances as most expenditures is fixed and tax recipes are over the target. Yes it is a kind of tax on people but in healthy economy who cares?

Most central banks and banks in general (also insurers) dread deflation not small inflation.

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

#207

Post by mancerayder »

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.

How do we know this isn't a great flippening event? It will take the West years to recover - we haven't even started. East Asia is up and running.

We only started forcing (politely) people to self isolate. That's right, in NYC there are still crowds, and cops aren't able to keep people apart. Polite communitarianism.

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

#209

Post by mancerayder »

tathougies wrote: post #183
marcus_holmes wrote: post #166

Earlier quoted context omitted.

I recently moved to Berlin, and the whole rental market here is awesome. Rent controls mean the rents aren't huge (but they are rising because of the high demand). But the amazing thing (to someone from UK/Australia anyway) is that I can repaint, make alterations, drill holes in the walls, etc. I might have to put it back the way it was at the end, but the landlord can't stop me from doing what I like to the place wh…

> I might have to put it back the way it was at the end, but the landlord can't stop me from doing what I like to the place while I'm here. A whole different attitude to renting. This is the same in the US, FWIW. Most landlords aren't going to care what you do, as long as you don't damage common areas and return it in mint conditoin.

Nah, it depends on the building rules. There's no such law. In my building you need to give a deposit just to install curtain rods, for example, or hang a TV.

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

#210

Post by gnopgnip »

mancerayder wrote: post #88
mrfredward wrote: post #24

So the time value of money is more or less zero now and loan rates depend much more on default risk than any opportunity cost in loaning the money. To an economist, the implications of that might be big, but to a regular person, it's really a small shift in possibilities. A savings account at 0% doesn't build wealth, but it didn't really do that 3 months ago at 1.5%. Personal loans at 9% aren't much better than loans…

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…

If you mean you sold your home and invested in stock market just before this all happened, you probably lost 20-25% as of right now as opposed to just holding on to the property. A bear market doesn't mean anything about real estate prices, and in practice demand for real estate increases as the stock market and bond market drops
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