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Originally Posted by supafamous
Don't disagree there - high inflation (like the 8% we're seeing now) is a dangerous thing. I just suspect that if we get down to 4% that the pressure eases a bit and it's not a rush to 2% b/c at that point the downsides of chasing 2% from 4% are not worth rushing (whereas going from 8% to 4% is pretty important) and the bank says "We'll get to 2% in the next 36-48 months" (rather than in the next 6-12 months).
There's going to be some balance to be found as we get closer to 2% as the chase to it will lead to a lot of other costs and those costs increase as we get closer to 2%. Stagflation would SUCK.
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While I agree 4 to 2% could be slower, the different between 4% and 2% inflation is the value of money getting halved in 25 years (4%) vs 50 (2%) years.
So 4% is still really bad from a financial point of view across all aspects.
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Originally Posted by Hakkaboy
yeah that's what I don't understand from some of the posts here. It seems that people actually think that sub 4% is some sort of "normal" interest rate or something, instead of viewing it as historic lows
Were people too young to remember what it was like before 2008 and the significance of 2008? And now the pandemic?
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I was 18 in 2013, so all we've ever known were rates that ranged from 0.99% - 3%, 4 - 6% doesn't even exist in our world. That's why a majority of the younger crowd think that 4% isn't normal.
4% - 5% is low, 6-8% is normal based off of the last 50 years. Yet everyone is acting like the world is fucked up that the rates are now as high as 4 to 5% interest. I think the people who make such comments doesn't have a solid understanding on how our financial systems work. But they never taught you in school. What's even worse is if you try to learn and fall into those conspiracy traps, you just end up hating the government and start complaining how this or that can be better but you don't do anything yourself to change it.