You are correct, we are in a comparable situation to where we...

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trentwilliam

263 Posts.

104

18/04/20

19:48

Post #: 44120486
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Originally posted by BabaRoga_space: ↑

You guys are reading too many 'debt and end of the world/capitalism' bedtime stories.

To put into perspective:
US $21 trillions debt isn't even the highest ever debt.
US had 120%+ debt to gdp compared to 100%+ debt now.

It paid it off by standard fiscal policy of negative real interest rate (inflation is higher then interest rate repayments) thus inflation removes interest repayments and eats away debt.
It took couple of decades to bring the debt down the 30% of GDP.
Older felles here will remember skyrocketing house prices and 15, 18% interest rates which are result of such fiscal policy in 70's.
USA only had few years of small budget surpluses in that time and was still borrowing money effectively while debt was being repaid.
And that answers your question for probability of house being worth $3million and interest rates going up ever again.

Magic

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You are correct, we are in a comparable situation to where we were after WW2... Except, we're only at the start of this.
Plus - The gigantic biggest ever household debt bubble - credit cards didn't even exist in 1946.
Plus - The real estate bubble being popped twice (tourism being dead causing Air BNBs to flood the rental and sellers markets + job losses).
Plus - Stock market bubble.
Plus - Stagnated wage growth.
Plus - Either inflation/stagflation/deflation

...... Safe to say we're in a pickle

GXY Price at posting: 78.0¢ Sentiment: Hold Disclosure: Not Held
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0 Great analysis

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