U.S. Unemployment Rate Drops to Lowest Since December 2008

[No Free Beer]

If someone offered to lend you $100,000 at a post-tax rate of 2.8% for the next 30 years would you turn that down?

please be more specific.

[Jordan]

please be more specific.

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

[WilliamShrugged]

I don't understand how this can be sustained, but they've sustained it all these years so there's no reason for me to necessarily believe that this is the end. Heck, I thought the 2008 crash was the beginning of the end. I can't believe that hyper-inflation hasn't smacked us hard, yet. But it hasn't, so maybe it won't.

Just a perspective to add. remember the video on the "Morning Joe", where they had Ron Paul's quotes on the housing crash? The quotes date from 2003. That's 7-9 years after the dot-com bubble, and 5 years before the housing crash.

[No Free Beer]

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

[The Binghamton Patriot]

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

I'm offering you an amortizing loan that, after taxes, will cost you 2.8%. The loan amount is $100,000, and it will amortize over the next 30 years. Do you take my offer?

If you're rational, you do. You realize that the cost of carry is negligible, virtually zero, in fact, and that you're getting all the time value in the world for mere pennies. Going into debt at today's low interest rates are perhaps the smartest thing you could ever do.

[oyarde]

I do not need the 100k at any interest .Not interested.

[tod evans]

I'll safeguard your $100k for 10% annually.....

[No Free Beer]

I do not need the 100k at any interest .Not interested.

I tend to agree with you.

But again, this is why Jordan's question, at least as it stands right now, doesn't make any sense because he's not being specific.

[Jordan]

Well, it matters what it's for. If it's something I need, like a home for my family (which I doubt you can find for 100K), I would say no. I don't want 100,000 jsut to have 100K, even at 2.8%. That's stupid. Again, you seem to be promoting debt.

The only benefit I could see (maybe) is if you obtain a tax deductible because of it. And the only way I would accept that is if I truly SAVED money.

This is exactly the point I am trying to make. It seems as though Keynesians just say "hey, go get in debt, it's okay! Just look how great those rates are!!!" When, if I don't need it, why accept it?

I don't want to be a slave to anyone if I can help it.

And for you to imply that if I don't accept that, I am "irrational" is ridiculous.

I'm sorry you see it as slavery. I see it as opportunity, as do many Americans. Debt is okay at these rates and assuming that you have the income to cover it. Rising consumer debt levels are not a concern, anyway, seeing as the total debt Americans hold is more manageable than their debt in 1994. We're a well financed country with ample cash flow to cover our liabilities.

jordan you need to be more specific. 2.8 percent a year? APR? EAR? you need to state whether or not the interest on the loan is tax deductible as well. the cost of carry is below inflation, so if you're talking about a fixed rate loan @ a cost thats less than inflation, its more advantageous than taking on debt at a rate thats higher than inflation without any tax benefits.

EAR after tax benefits. All in cost to you is 2.8%/year. But you're making this more complicated than it needs to be. Makes way more sense to borrow money today than at any point in history. And, let's be real here, if you're an inflationist, you should be grabbing every fixed rate loan you can find at today's interest rates. Debt isn't a problem, not at all.

The point of all this: Debt is inexpensive today. It's free if you're an inflationist. Therefore, you should not fear a rising level of debt. It is manageable, and the majority of it is fixed rate. The debt Americans hold today is not like the debt of 2006; it's not debt to a mortgage lender for a negative amortization loan on a bubblicious home with rates that could reset. Catastrophe was built into the system during the debt-fueled mortgage boom of the 2000s due to negative amortization loans and resets. Those are long gone. Debt today isn't relatable to debt in the mid-2000s, and it is much less costly than it was even in 1993. Debt is hardly a weak point for the American consumer.

[oyarde]

I honestly doubt the avg American even has a clue what they end up paying on a 100,000 dollar home on a 30 yr fixed rate loan , of any rate by thetime it is done...