Relatives of ours bought a house back at historically low interest rates. They also got an adjustable rate mortgage because they were sure interest rates would never rise.
Honestly found this insane. People were getting 1-2% mortgages and not getting fixes because they thought it would go lower. Just completely dumb. The upside was so little but the downside was huge.
Softbank and Tiger are famous for revolutionizing VC by using an index-fund-like strategy and investing in everything. I don't think this is a ZIRP phenomena - it's a bold but not unreasonable idea. What is a ZIRP phenomena is how absurdly huge they got in the last years.
Scary how many people have such an low financial literacy
What's even more shocking to me: how people feel entitled to stuff they can't afford. It doesn't even cross their mind to stay humble and save up for what they really want.
When I paid off my debt (10x less than yours), it didn’t feel like much at first, but eventually it felt like a storm had cleared. That low grade chronic stress was gone.
haha thanks. maybe it was anticlimactic because i had the money set aside waiting for the federal loan pause to end... just hurts to think of the total in pre-tax dollars haha
When I think on this, it's hard to imagine anything that's emerged in the last 10-15 that isn't ZIRP-based in some fashion.
Same-day, next-day, two-day shipping might be a surprising one. For businesses at scale, debt is definitely being used to subsidize customer acquisition costs to later be redeemed over the customer lifetime. With interest rates rising, many of these kind of things will implode.
Venture capital, once a niche investment class, in general exploded through ZIRP. How much debt is financing that I wonder?
I've been calling BNPL ZIRP cancer for years now. Its so unoriginal that it has an initialism I guess.
That's so many businesses. That's likely all of retail that Amazon didn't already kill. Automakers and airlines are probably going to need to be bailed out again.
I'd guess a lot of our economy, and what manufacturing base we have, depend on ZIRP.
I hadn't thought about much of this until now. All the supply chain disruptions, labor force problems, and so much more, are rooted in the rate hikes to some degree.
I think hustle culture gets me all the time because I feel for it so hard, its such a band aid approach like oh okay you can't save, go find ways of generating more cash flow with your time, as if everyone can sell to everyone all the time, its like some MLM kinda shit