I also agree that low rates were good as you could invest in property with leverage and in businesses which could borrow and raise money to cheaply to grow.
Nobody is having a good time right now.
Anyone with debt is better off with higher inflation as the amount required to pay back is worth less. Anyone who gave money away for interest takes a haircut. The richer entities usually loan money so this is better for the poor with debt. If wages don't raise than this changes
Loans to the poor will always have an above-inflation rate. And the poorer you get the more extreme the rates.
Interestingly this is somehow not considered inflationary.
The real metric isn't total cash, it's outgoings vs income.
Billionaires do not have significant non-discretionary outgoings. At the billionaire level food, housing, and transport are essentially free, and your time is your own. There may be mild chagrin if you can't afford a bigger yacht or another private jet, but mild chagrin is all.
That's not true for most people. The poorer you get, the more aggressively you have to sell your time, and the more likely it is that your outgoings are going to exceed your income.
Not because you can't organise your finances, but because inflation and wage stagnation have made any other outcome impossible.
I noticed you didn't say "declining" because that wouldn't be true.
1 Feb Guardian - house prices fall for fifth month in a row
1 March Guardian - house prices fall at fastest annual rate since 2012
The price-to-earnings ratio is 9X in London and around 5X in the rest of the UK.
Property speculation is always ten steps forward and one step back. Prices in the UK would have to crash by at least 50% to return to any kind of widespread affordability.
At least 2-3 years, anything less is too small a sample size. You could be highlighting a 10% decline after a 200% increase.
You can't get something from nothing.
This was simply subsidizing business borrowing / capitalists at the expense of the labor's purchasing power.
It shouldn't be a mystery why inequality sky-rocketed to surpass Belle Epoch levels under ZIRP.
it's emergent out of the incentives e.g. the Cantillion effect
it wont be around forever with AGI making this so obvious
It's what you're seeing happening in Silicon Valley right now.
Usually a reality check occurs every decade or so, bringing heads back down to Earth, but I think too many felt that the COVID lockdown lows in the markets were that reset. They then went right back to their old habits, after a brief pause.
Just thinking about how long it took to recover from 2000, 2008, etc., it's obvious that we didn't truly have that reset.
The lockdowns fundamentally changed a lot, but few people seem to want to acknowledge it. The effects of the lockdowns will been seen for a long time, I honestly do believe.
Just my take on it all.
this is true in the short term because a lot of assets are held with borrowed money. when interest rates go up those assets get sold to cancel the debt and bring down the market value.
however, either if inflation is sustained or interest rates go down, asset values will inevitably bounce back, but money will NEVER recover its value.
Well, idk about your area, but property prices in northern Germany are still well above the 2020 mark.
https://www.theguardian.com/commentisfree/2023/mar/05/house-....
"UK house prices defy gloom with an average £3,000 rise"
20/03/2023
https://www.theguardian.com/money/2023/mar/20/uk-house-price...
UPDATE: I can see a comment below says they have gone up in some places. Well, when both rates AND prices have gone up, it is not hard to tell :-)
I present you the US housing market.