The Real Housewives of Wall Street
The Real Housewives of Wall Street
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth
Goddamned slippery mage.
Goddamned slippery mage.
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- Sojourner
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Re: The Real Housewives of Wall Street
yep... sounds about right. disgusting and unsurprising. money and power working to ensure that money and power remain that way. Again, why government needs a lot less damn power.
although... I'm not sure that getting money at 0% then buying government bonds that pay 3% is a good idea with monster inflation on the horizon.
although... I'm not sure that getting money at 0% then buying government bonds that pay 3% is a good idea with monster inflation on the horizon.
Re: The Real Housewives of Wall Street
borrowing money at 0% and buying a 100% safe investment at 3% means a guaranteed profit. Why not? Even if you have inflation you make money because you pay back the loan in devalued dollars. Either way you look at it you just earn the spread between 0 and 3%.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth
Goddamned slippery mage.
Goddamned slippery mage.
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- Sojourner
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Re: The Real Housewives of Wall Street
Hmmm does that work?
You loan $1,000 at 3% and inflation is 10%. after 2 years you've earned $63 and lost $210 in value.
You loan $1,000 at 3% and inflation is 10%. after 2 years you've earned $63 and lost $210 in value.
Re: The Real Housewives of Wall Street
kiryan wrote:Hmmm does that work?
You loan $1,000 at 3% and inflation is 10%. after 2 years you've earned $63 and lost $210 in value.
Sure, but the $1,000 would lose the same amount of value either way. So you can either lose $210 and gain $63, or just lose $210.
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Re: The Real Housewives of Wall Street
Well usually interest rates are loosely tied to the inflation rate. If inflation is high, interest rates go up... Being locked in at a certain interest rate with the inflation rate surpassing that doesn't sounds like making money to me, it sounds like losing money...
but I guess what I'm missing here is that if you're using the government's money, then its free money no matter how you look at it.
but I guess what I'm missing here is that if you're using the government's money, then its free money no matter how you look at it.
Re: The Real Housewives of Wall Street
kiryan wrote:Well usually interest rates are loosely tied to the inflation rate. If inflation is high, interest rates go up... Being locked in at a certain interest rate with the inflation rate surpassing that doesn't sounds like making money to me, it sounds like losing money...
but I guess what I'm missing here is that if you're using the government's money, then its free money no matter how you look at it.
I'd guess the interest rate is fixed. Most interest rates don't fluctuate on a given loan, the changes just affect new loans. And even if the interest rate goes down, you're making it on top of the same amount of money. In other words no matter what you do you lose $210. Even if the interest rate goes from 3% to 1% or 0.5% it's more than you would have had without the interest.
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I detest what you write, but I would give my life to make it possible for you to continue to write. - Some Guy Who Paraphrased Voltaire
I detest what you write, but I would give my life to make it possible for you to continue to write. - Some Guy Who Paraphrased Voltaire
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Re: The Real Housewives of Wall Street
What I was trying to get at is that if you lock yourself in at 3% interest when massive inflation is being predicted... you're making a really bad decision.
The only thing that makes this a "win" for the ladies is that they aren't using their money. If they were using their own money, I'd call them stupid.
The only thing that makes this a "win" for the ladies is that they aren't using their money. If they were using their own money, I'd call them stupid.
Re: The Real Housewives of Wall Street
The short answer is you don't have any of your own money in the game. You borrow $1,000 at 0%, invest it at a guaranteed 3%, and then a year later you have $1,030. You owe $1,000 back, which you pay. You have $30. Even if there was massive inflation and that $30 buys you half as many widgets one year from now than it does now, you still came out ahead. Borrowing at 0% literally is free money.
Having said all that, the situation has been handled, so this thread is pretty much at an end. -Kossuth
Goddamned slippery mage.
Goddamned slippery mage.
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