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I don't recall home prices dropping in the 70's, maybe stayed the same but seemed rather inexpensive compared to present day.
It probably depends on the market and where you are trying to buy and sell. I lived in places with fairly new construction dependent on corporate transfers.
If a family needed to drop their price to sell due to high interest rates, the company covered their loss.
Why can't a bank or lender offer higher than current typical rates?
Uh, I hate to be the one to tell you this, but what they lend at often depends on what they get that money for - from the Fed. Gubment.
That rate is now 1.75%
They also lend money based on what their average sucker is willing to lend THEM money for (CDs, interest bearing checking accounts, etc.) which also averages now around 2%.
If they offered higher rates, they wouldn't get any business. As it stands, they are easily doubling their money and more (they lend for cars and personal loans, etc. at much higher rates)...
The piper calls the tune and that is the Fed Funds or Prime or Libor or other set rates. They were basically giving money away free to "stimulate the economy". What they were really doing was screwing savers and rewarding debtors. In a sane free market debtors would not be rewarded...and savers would not be screwed.
This is opposite world.
As far as home prices - in many areas they have never gone up, and in fact went down. We sold our house in a high demand areas of NJ in 2004 for 369.
The next sale of it was 9 years later for $249.
Now it's for sale again - looks like about 100K in improvements and upgrades were put into it. The sale price is $349K....
Making money from housing is like playing the lottery. You hear about the few who win but not the millions who lose. Over the long run of 100-150 years, housing has gone nowhere (something like 1% a year). These days it is probably worse because of high property taxes and the high cost of having work done.
Houses are places to live and depreciating assets. That's why the government lets you depreciate properties you buy for a rental business (as one example)....because they ARE worth less each year.
But back to the interest rates. Only a simply question need be asked of each of us - if you saved up 100K how much interest would you want to lend it to someone for 30 years? How about for 10 years? The collateral being a house???
I don't think anyone here would answer under 5-7% for 10 years and much more for 30, yet you can borrow at 1/2 these rates.
Not a free market by any measure. Grandma...who saved her pennies...is being sacrificed on the altar of corporate profits and GDP that must continue to rise (even if we borrow both as a country and personally to do it).
Uh, I hate to be the one to tell you this, but what they lend at often depends on what they get that money for - from the Fed. Gubment.
That rate is now 1.75%
They also lend money based on what their average sucker is willing to lend THEM money for (CDs, interest bearing checking accounts, etc.) which also averages now around 2%.
If they offered higher rates, they wouldn't get any business. As it stands, they are easily doubling their money and more (they lend for cars and personal loans, etc. at much higher rates)...
The piper calls the tune and that is the Fed Funds or Prime or Libor or other set rates. They were basically giving money away free to "stimulate the economy". What they were really doing was screwing savers and rewarding debtors. In a sane free market debtors would not be rewarded...and savers would not be screwed.
This is opposite world.
As far as home prices - in many areas they have never gone up, and in fact went down. We sold our house in a high demand areas of NJ in 2004 for 369.
The next sale of it was 9 years later for $249.
Now it's for sale again - looks like about 100K in improvements and upgrades were put into it. The sale price is $349K....
Making money from housing is like playing the lottery. You hear about the few who win but not the millions who lose. Over the long run of 100-150 years, housing has gone nowhere (something like 1% a year). These days it is probably worse because of high property taxes and the high cost of having work done.
Houses are places to live and depreciating assets. That's why the government lets you depreciate properties you buy for a rental business (as one example)....because they ARE worth less each year.
But back to the interest rates. Only a simply question need be asked of each of us - if you saved up 100K how much interest would you want to lend it to someone for 30 years? How about for 10 years? The collateral being a house???
I don't think anyone here would answer under 5-7% for 10 years and much more for 30, yet you can borrow at 1/2 these rates.
Not a free market by any measure. Grandma...who saved her pennies...is being sacrificed on the altar of corporate profits and GDP that must continue to rise (even if we borrow both as a country and personally to do it).
A bank or lender can offer loans with higher than current typical rates, but no one would be so foolish as to take such a loan. My point. Of course banks have to profit. Fed moneys make at least some profit easy.
And buying more Chinese goods IS the economy......
This is all part of parcel of praying at the altar of corporations instead of Sustainability and Happiness. More Chinese junk bought from debt does not equal Happiness. In fact, what it offers is crass materialism (which has a negative effect on happiness) and more debt and deficit and trade imbalances.
If the economy needs to contract to meet the actual demands..independent of free money, then it should do so. The idea that we'll never have to pay the piper is ridiculous.
And buying more Chinese goods IS the economy......
This is all part of parcel of praying at the altar of corporations instead of Sustainability and Happiness. More Chinese junk bought from debt does not equal Happiness. In fact, what it offers is crass materialism (which has a negative effect on happiness) and more debt and deficit and trade imbalances.
If the economy needs to contract to meet the actual demands..independent of free money, then it should do so. The idea that we'll never have to pay the piper is ridiculous.
Imports are a large part of any advanced and successful economy. Most of us are materialists. Being necessary for a successful capitalist economy. The Chinese produce many of our real goods for cheaper than we can. So we all have more money to spend on other things.The Chinese use up their resources and pollute their environment, while we pay them for real goods with vapor fiat.
Imports are a large part of any advanced and successful economy. Most of us are materialists. Being necessary for a successful capitalist economy. The Chinese produce many of our real goods for cheaper than we can. So we all have more money to spend on other things.The Chinese use up their resources and pollute their environment, while we pay them for real goods with vapor fiat.
Most every indicator shows that Americans - compared to their peers - are unhappy. Therefore, this particular brand of materialism (WAY over and above what is needed and backed by debt - meaning many workers know they are going to spend their best years at the salt mines) is not working.
This would be the case whether we paid with cash, bitcoin or gold.
I guess a lot of people are so accustomed to it that they don't even see what is before their eyes. I walk into a supermarket or drug store and it's just crazy to have to pick one of 200 toothbrushes, each proclaiming their superiority. I stopped buying most OJ because they disguised the bottles and you end up bringing home OJ with chalk in it (calcium enriched!)....
I would be all for it if we paid as we went (even with fiat currency!) and the products actually increased happiness, life spans, etc.
But they don't. Quite the opposite. The USA is one of the few countries that pays 2X what the others do in health care and STILL, average life spans have stalled...and are even going down among many populations (white, uneducated folks)...
The problem is that adults are no different than children. Put ice cream and candy in front of either full time and you get the same result(s). Obesity, diabeties, unhappiness, etc. leading to excess drug and booze use and other societal problems.
But, hey, those problems make a LOT of money. If I'm not wrong all the "fixes" for our ills makes the total amount we spend on illegal drugs look small.
Remember, GDP includes more prisons, high priced health care, detox clinics and war. Having it expand due to these factors and high rents and home prices isn't healthy for our citizens - General Welfare and Happiness. I don't see anywhere in the Constitution where it says "give up happiness and general welfare for more prisons, drug rehab centers and predatory health care corporations".
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