Negative Interest rates !

[gzz]

[quote=FlyerInHi] I was at a Chinese owned granite store in Vegas. They sell slabs for $120 and up ($79 holiday special) That’s cheaper than Formica. There aren’t too many choices and everything is pre manufactured. So many colors are bullnose only and you can’t get it any other way. But prices are cheap so there’s no reason not to have granite countertops.
http://www.builderelements.com
[/quote]

Have you used them before?

I used Home Depot a few months ago for new granite kitchen counters at $35 a square foot installed. I am very happy with the result. They only had 5 colors at that price, but I found a dark green one that I liked.

I actually have five different bathrooms in two houses that all could use some nice new counters, and two of them could use new showers.

I know you say you want your properties to feel like high end hotels. I like my living spaces more rustic, but that sounds perfect for bathrooms, with new metal fixtures and polished stone everywhere, perhaps with double shower heads, a steam feature, and side water jets.

[spdrun]

A storm is brewing again.

I read “storm” as “opportunity.” And good.

[livinincali]

[quote=FlyerInHi]In hindsight, it only seems self-evident that deleveraging would lead to lower demand. Some economists were actually quite right at predicting very little, if any inflation following the 2008 financial crisis.[/quote]

I honestly don’t think there’s anything the fed or government entities can do to prevent the deleveraging. They can probably impact how it unfolds but the thing of value in a debt scenario isn’t the 1’s or 0’s it’s the future productivity that is promised. So if you reduce those future promises via raising the minimum wage to $50/hr and helicopter drop money or by refusing to honor those future promises the net result is the same for the creditors. You aren’t getting what was promised.

Historically major deleveraging events have resulted in roaring economies once the deleveraging event is over. Ever hear about the 1920-1921 depression and the roaring 20’s. It’s the attempt to prevent that deleveraging from happening that results in stagnant economies with low growth. We’re in this phase where we’re desperate to get companies and people to borrow more to fuel consumption but the demographics are against us, the interest rates are against us, etc.

This current fed sponsored bubble with low rates isn’t doing much for the real economy because nobody is using those low interest to actually invest in the real economy. It’s all stock buybacks and financial engineering. The one place where there’s some real economy impact is sub prime loans in the auto industry but how long does that last before it blows up.

[FlyerInHi]

Although individuals save to consume in the future, in the general economy, the present is the present. The future is the future.
Your savings have to be invested somewhere today, at the rate of return in effect today. And if you don’t consume today, that means lost income for someone else.

The government cannot prevent deleveraging, but the government can spend to replace the demand that has been lost. Ben Bernanke talked about that.

[FlyerInHi]

[quote=gzz]
Have you used them before?

I used Home Depot a few months ago for new granite kitchen counters at $35 a square foot installed. I am very happy with the result. They only had 5 colors at that price, but I found a dark green one that I liked.

I actually have five different bathrooms in two houses that all could use some nice new counters, and two of them could use new showers.

I know you say you want your properties to feel like high end hotels. I like my living spaces more rustic, but that sounds perfect for bathrooms, with new metal fixtures and polished stone everywhere, perhaps with double shower heads, a steam feature, and side water jets.[/quote]

Yes, I’ve used them before… I have a local guy who installs the granite for me.. I just buy the material and he does the job. I’m like my own general contractor.

People can say whatever they want about China, but as a consumer, I love China. Thanks to them, my money can buy more. At the Vegas store, they all wear red t-shirts. Guys in the 20s which make me think of diligent enterprising communists who found the glory of capitalism.

I use Ikea cabinets which I think are much nicer than Home Depot/Lowes. Their cabinets have glass shelves and frameless which make them look airy and open. Plus they sell tons of accessories that fit perfectly. Open the cabinet and it lights up. Cool! (I’m glad they will soon open an Ikea store in Vegas).

It’s all about design and putting it together in a comprehensive attractive whole. A lot of investors/remodelers don’t know how to put it together so their properties have that typical brown/earth tone flipper special look.

I’m not flipping but holding and renting to good, clean, employed tenants.

[Anonymous]

[quote]This current fed sponsored bubble with low rates isn’t doing much for the real economy [….][/quote]

What’s the real economy? Is there a fake economy?

[FlyerInHi]

I heard economics explained this way and it’s helpful.

Money and productivity are perishable. If we don’t use it, the wealth is gone forever.

If a factory is idle, the wealth it could have produced is gone forever. So, somehow, if we could get the factory running, we’d all be richer. Same goes for human productivity. All that productivity cannot be saved for the future unless we have a time machine.

Money is just the lubricant to get the productivity machine running. A resource that we invented that is completely limitless. Unlike natural resources such as oil that do run out, we don’t need to save money because we can always make more.

Of course, individuals and organization use money as a store of wealth, but that is separate from society’s goal to maximize weath and wellbeing for everyone.

The decks are rearranged as different people and entities accumulate money and others run out, but that is kind of irrelevant in the big picture.

[FlyerInHi]

The ECB lowered rates once again and expanded QE.
http://www.wsj.com/articles/ecbs-interest-rate-decision-is-challenge-for-eurozones-neighbors-1449156102

[phaster]

[quote=HLS]They need to be careful what they wish for…
there are always unintended consequences.
They might do the opposite of what they are supposed to.

http://www.businessinsider.com/the-effect-of-negative-interest-rates-2015-11

Are you familiar with carry trade ?
I don’t see how rates can rise much in the US
(maybe .125%) when there are forces going the opposite way.

It may turn out that a 2% long term bond is an amazing return.

The average person will probably never have the opportunity to borrow large amounts at very low rates however there are some simple strategies that
people with good credit can take advantage of today.

People who can least afford it are paying 20%-30% interest on credit card debt and it’s become a way of life for many.

Negative interest rates do pose an interesting concept and paying interest on anything will only be for the poor.

[/quote]

so what’s so bad about economic darwinism?

eventually the poor “should” learn that using credit they can’t afford is going to cost them big time….

the big lesson I’ve learned looking at the state of the economy these past few years is:

it sucks to be poor (and stupid) and better to be rich (and smart)

😉

[Author]

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