The 50 year mortgage is the BEST investment anyone disenfranchised from owning assets can ever make. It’s a flat out long term bet against the dollar. Average people can now afford to make a huge short on the dollar, while getting to live more affordably inside of it!
Borrowing is incentivized by the ubiquitous watering-down that currencies seem always to fall victim to. Spend good money now, pay back diluted currency later. As in Weimar hyperinflation, it transfers value inexorably from owners to debtors. Boomers sitting on a million in cash lose its value. But the little borrower doesn’t profit. The Donalds do.
The fifty-year homeowner wants interest rates as low as possible, just like Donald wants. They appreciate inflation, as it waters down currency values. On a macroeconomic scale, the velocity of money is goosed upwards.
For an economy, easy credit and inflation are like doing meth. Free energy no cost! But interest rates follow inflation, and when there are too many bad loans in force, the creditors recovery drops, and the price of lending- the interest rate-corrects by increasing. If a government just prints more money, printing more keeps interest rates down. But something has to give.
I have been in the real estate business since 1974. The 50 yr mortgage will only help buyers for the first 6-12 months after they become available. Then the increased demand will always raise prices. Making more money available to purchase a house by extending mortgage length or requiring less down payment is not the answer. Less regulation, zoning restrictions, and planning department despots will make building a house cheaper and increase the supply. That is the answer.
The 50 year mortgage is the BEST investment anyone disenfranchised from owning assets can ever make. It’s a flat out long term bet against the dollar. Average people can now afford to make a huge short on the dollar, while getting to live more affordably inside of it!
Borrowing is incentivized by the ubiquitous watering-down that currencies seem always to fall victim to. Spend good money now, pay back diluted currency later. As in Weimar hyperinflation, it transfers value inexorably from owners to debtors. Boomers sitting on a million in cash lose its value. But the little borrower doesn’t profit. The Donalds do.
The fifty-year homeowner wants interest rates as low as possible, just like Donald wants. They appreciate inflation, as it waters down currency values. On a macroeconomic scale, the velocity of money is goosed upwards.
For an economy, easy credit and inflation are like doing meth. Free energy no cost! But interest rates follow inflation, and when there are too many bad loans in force, the creditors recovery drops, and the price of lending- the interest rate-corrects by increasing. If a government just prints more money, printing more keeps interest rates down. But something has to give.
I have been in the real estate business since 1974. The 50 yr mortgage will only help buyers for the first 6-12 months after they become available. Then the increased demand will always raise prices. Making more money available to purchase a house by extending mortgage length or requiring less down payment is not the answer. Less regulation, zoning restrictions, and planning department despots will make building a house cheaper and increase the supply. That is the answer.