Re:Fed raises rates by another 75 bps to fight inflation
by monlockandkey on Thursday September 22, 2022 @05:14AM
(#32936502)
If debt was not so widespread, then the cost of assets would be correlated to salary.
Now with immediate injection of cash, assets are at prices which require money that an ordinary person will never have. They have to jump on the debt treadmill to acquire necessities.
Re:Fed raises rates by another 75 bps to fight inflation
by ejb999 on Thursday September 22, 2022 @06:13AM
(#32936890)
excellent point - buying a new car is a good example, allowing someone to take out a 7 year loan to payoff a new car, allows the car companies to simply charge more for them - as a large portion of people make their decisions based on being able to afford the monthly payment, not the total price.
Re:Fed raises rates by another 75 bps to fight inflation
by nebula8804 on Thursday September 22, 2022 @12:45PM
(#32941414)
That does not seem like a good example. The car industry is extremely competitive and capital intensive. Margins are so thin on the lower prices sedans that some companies (GM, Ford) have just given up on the segment.
Re:Fed raises rates by another 75 bps to fight inflation
by CodesInChaos on Thursday September 22, 2022 @10:45AM
(#32939507)
I think easily available loads are largely responsible for the high cost of college education in the US.
Unpopular opinion, and maybe I'm wrong here and I've just been lucky, but I've stopped seeing debt as a bad thing. You have to use it smartly of course, but I don't think there's a one-size-fits-all answer for what that means. Use it for daily living expenses? Sure, as long as you can pay it off every month. Never take out a loan and spend years saving for a car? Nah, or at least not when that interest rate was 2-3%. And I suppose that's where increasing interest rates come in: Get the 99% to stop buying.