Is very low interest rate the norm?

Discussion in 'Economics' started by 0008, Feb 14, 2020.

  1. 0008


    It seems every time the economy shows a bit weakness they will cut the interest rate.

    Will we have chance to see the rate goes up to 10% like the 1980s?
  2. Probably not. Too many have taken on soooooo much debt at low rates that they wouldn't be able to service their debt if rates increased much.... which would lead to defaults as far as the eye can see.

    Looks like we're stuck with the low rate folly. It's going to run and run and run... until the entire financial system collapses and is forced to reset... bankrupting nearly everyone.

    Have a nice day.

    dennis86, Nobert and Clubber Lang like this.
  3. Nobert


    10% = Argentini Bonds ;)

    Diminishing returns, for the next 4 decades, some say.
    (For average joes)

    But for retailers, with higher than amateur skill set level, nothing to worry about.

    8k tickers in equities only, opportunities all the time, all over the place.

    But if one is lazy,
    there always is...
    Naked TSLA calls ;D !
    Last edited: Feb 14, 2020
  4. Turveyd


    Been this low for what 15+ years, so guess it's the new normal.

    Old days they made people suffer and it solved the issue, these days, they ignore it and pamper people and it makes the issue worse, sad sad times.
  5. Is a "reasonable financial landscape" which constrains people to live within their means... suffering?
    Last edited: Feb 14, 2020
  6. Sad part... you could make a $$$zillion-gazillion, but when the government devalues the currency it won't matter how many dollars you have. They won't buy anything, effectively*, and you'll be bankrupt too.

    * Your money won't "go to zero", but it will at some point be like the Weimar Republic... where it took a wheel barrow full of Marks to buy a loaf of bread. So see, your money won't be "worthless"... just almost.
  7. Nobert


    Argentini was a joke*
    7 (?) times bancrupt, as good as those calls for Tesla

    Funny thing, right now atm, im at page 198 of Security Analysis by B.G , wheres bonds of Argentine is above Norway (!) :) ( back in 1932 ) based on safety/risk.


    Last edited: Feb 14, 2020
  8. CALLumbus


    You know what kind of inflation rates there have been in the US (and also Europe) during that period ?
    You should look at the real rate of interest, not just at the nominal interest rate.
  9. RedDuke


    Another reason to keep rate low, is that many corps used low rate debt to buy back their own shares. Guess what happens of rate go up?
  10. dozu888


    not just norm.... permanent.
    #10     Feb 14, 2020
    zdave83 likes this.