Ask HN: How to prosper under negative interest rates?

Post by voisin » Wed, Apr 01, 2020, 3:03 AM UTC

mdorazio wrote: post #107

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…

1) Once again, inflation does not work that way. If it did, it would have been out of control in 2009. Instead, it was near zero. The same thing is happening right now. 2) The idea that 2-3% inflation is "really really serious" is completely absurd. I'm guessing you're young because historical US inflation prior to the ridiculous post-2009 financial situation had long periods of being well above 3% and the sky didn't…

Post by quickthrower2 » Wed, Apr 01, 2020, 3:15 AM UTC

tathougies wrote: post #180

bwanab wrote: post #117

Earlier quoted context omitted.

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.

Post by voisin » Wed, Apr 01, 2020, 3:19 AM UTC

amiga_500 wrote: post #165

abstractbarista wrote: post #66

Earlier quoted context omitted.

It actually is. You just can't be over-leveraged. The bank will give you waaayy more money than should ever responsibly be taken. Combined with emergency savings, you are quite safe as a homeowner.

And how do you bid in a market where every house has >1 bidder and banks are lending waaayy more than is responsible?

Post by a_tractor » Wed, Apr 01, 2020, 4:17 AM UTC

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…

Post by chewz » Wed, Apr 01, 2020, 4:53 AM UTC

voisin wrote: post #233

chewz wrote: post #206

Earlier quoted context omitted.

> 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 expendit…

> Inflation of 2-3% is actually desirable - it is a sign of healthy, growing economy. Why 2-3% and not 5-7% or -1-1%? Source for this assertion?