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158 sats \ 2 replies \ @freetx 2 Feb \ on: Given the chance would we do as the Boomers did? econ
Not exactly.
Interest rates in 1980 were about 13.5% and reached 18% in 1981.....
The high interest rates didn't destroy the boomers because in general few people had "investments", most people just had a savings account, so it was great to be getting ~10% in your regular bank account.
Part of the reason why boomers were able to make out so well on real estate was because housing prices were crushed by high interest, so there was no where to go but up, especially as interest rates moved towards 0 for nearly a decade. Added to that, the boomers had relatively little debt and so the high interest rates helped them because they had savings.....
There is more to the story (good paying jobs, etc).
Everyone would do it. Why wouldn't they?
My first mortgage was 18%, and it was a crazy negative amortization loan. I bought right before there was a big dump in the housing market. I didn't break even on that condo. Ever. I dumped it when I got married. I bought a house with my wife in 2007, right before the great financial crisis. I was lucky to hang on to it, but a lot of my friends weren't. This whole conversation reminds me of how I feel about bitcoin. I wish I bought it in 2012. When you zoom out the graph is straight up to the right. When you're living it the year to year ups and downs aren't so easy to navigate.
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Because of high inflation, housing prices did increase by 4 or 5x between 1966 and 1983.
The stock market started gaining momentum in 1983.
Inflation was under control by mid 1983.
GDP grew by almost 7 percent in 1984.
Reagan won 49 states.
Morning again in America
update:
In 1970, the foreign born population was only 5 percent. 1965 Immigration Act was still new and illegal immigration was much much lower than today (hopefully this will change too).
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