[quote=flu]Morale of the story…..borrow as much as you can at these ridiculous fixed term rates. Because in a few years this is gonna look cheap.[/quote]
I won’t over-borrow just because the rates are low.
Couple of years ago when Greenspan first started to offer ridiculous low interest rate, I had a friend who said “I don’t care the housing price is high. Couple years from now, maybe the price will drop but the interest rate will move up. And we end up in the same boat”. Fast forwarding a couple years, he has now foreclosed his house and moved to Arizona.
Maybe the rate will become cheaper again…after the initial bond price hike kills corporate America which is now very addicted to cheap debt. And if unemployment is 25%, I don’t know how one (household or corporation) can pay back the principal regardless of the interest rate.
