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JJG (yr comment 508059)
I gather that you are
referring to this one.
By nature I am a debt-averse guy. I also believe (big-time) in diversification.
Surely, I do not disagree with you, and on a personal level, people tend to get fucked with their consumer debt and credit card debt, so yeah, that is one of the first things that should be paid off. I completely agree.
On the other hand, there are peeps who get way the fuck better rates because they know how to play the system and also to get negative rates, which also might mean that they could take out a loan and even invest into something that is not exactly a money maker, and still come out ahead because they borrowed at negative interest rates.
Smucks on the street are not going to get those kinds of rates, and are likely going to continue to pay 18% or higher because either they do not know better or they otherwise have not figured out better ways to play the system to their own advantage, which also might well involve building up their own credit in order to be able to better work the system to their own long term (rather than short term
(aka gratification) feelings of) advantage.
The big institutions can indeed take advantage of ZIRP and maybe even NIRP, but no one will not pay me to borrow their money.
Depends upon where you are in life, and I likely would NOT have gotten as far as I have in life (financially) were it not for my abilities to borrow money, even though I tend to use debt strategically, and I hardly ever pay interest on any credit cards for my nearly 40 years of using them to my advantage.
Perhaps some of the very rich or well connected can take advantage of this environment to borrow.
Of course they can. One of the ways is with a Cantillon effect, but there are also more common sense ways of just being able to figure out ways to profit from more options that are available and to take advantage of those options without gambling.... like free money.. and free money can add up if it is used in an effective way.
There can be exponential growth with any kinds of interest, if you play the system to your advantage and stack your money sooner and engage in delayed gratification and living within your means rather than living beyond your means.
But, I doubt that most of us are in that small club.
I will grant that some people have more options than others, but anyone can figure out what options that s/he has and to attempt to maximize benefits for him/herself in order to expand available options.
On the other hand, if peeps act irresponsibly all of their lives and gamble all of their lives then they are likely never able to build enough bridges, structure and foundation in their lives in order to really get ahead and to get out of the ratt race.
In other words, I am suggesting that these tools are NOT exclusive to the rich, even if they have more tools at their disposal, and I also would not suggest that the rich are going to stay rich if they don't engage in their own prudence, because sometimes even the rich are so fucking deluded into consumption thinking that they end up squandering their opportunities and spending fortunes to go from being rich to being poor.
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