Home › Forums › Housing › What if interest rates go to 13%? › jficquette wrote: Net new
[quote=jficquette] Net new money isn’t created unless its borrowed. If no debt is in involved then its simply cash to cash.
The Fed doesn’t print money. It sets conditions to influence how much of it is borrowed. Its the borrowing that expands the money supply.
Low rates won’t help anything if people are not willing to borrow it.
John [/quote]
John,
So what happens in this case?
1. Govt offers non-recourse 30-year 3% fixed rate home loans to anyone with a pulse, no money down.
2. Govt prints any money necessary to make the loans.
Even I would borrow to buy an overpriced house with that arrangement.
