| Eh. You have wrong it. Market keeps going up because we continue to have global growth. Over 66% of countries are showing positive GDP and growth. US growth is also fairly high. Historically GDP averages around 1.8%. The talk of 3% is just politics. In addition, technology has created a lot of efficiency providing healthy profits for businesses. In addition, there is a high feedback loop of spending by all major businesses. Example: apple produces phones that require a lot of software and hardware to work which means a lot of other companies involved which also creates competition among multiple phone companies to also produce something similar and so on. Yes we are at a fair valuations and I sincerely hope for a 10-20% correction. But we are in a 20 year bull run with minor bears in between. About money printing. Yes I agree some day one of the central banks will be trouble but other will bail it out. Also cheap money is good. It helps mid to lower income families come up. Micro loans are good example of it. Why can't lower income generating families have access to cheaper money ? Why do they have to pay 8-10% interest? Imagine if you were from a low to mid income family, wanting to go to school won't you want cheaper loans. And if people abuse that privilege then they will pay for it. If you are just getting out of school and need some house loan etc. won't be bette to have easy access to money? Or do you want 8-10% interest ? Yes I agree a lot of money has been printed but it has created healthy money vilocity that has gone appropriately to create value for everyone. World was much worse 15 years ago just go back and look. |
Not if everyone has access to easy money, no.
House prices are roughly set by prevailing rents. Take the cost of renting and the cost of ownership and set them to roughly equal. Now, drop interest rates on mortgages a couple percent, what happens to house prices? Monthly payments of mortgages go down, renters and potential landlords see it and try to win bids for houses, driving housing prices back up again.
Much the same thing is, IMO, going on with college prices: since they're largely financed, easier credit leads to higher bids. I'd much rather have college affordable period on a part-time entry-level salary than have interest rate times tuition be affordable on a white-collar salary.
Basically, lower interest rates doesn't particularly help future borrowers. Falling interest rates helps folks who hold assets and can sell them or refinance the debt servicing them.