undefined | Better HN

0 pointshnnewguy11y ago0 comments

I'm not going to deny that much of what you describe is occurring. America is a harsh, dog eat dog place. I'll only comment that it isn't unique to this point in time, and isn't a result of Fed actions regarding the Great Recession (post hoc, ergo propter hoc).

But what does irk me a bit is:

"My major point is so many of us are losing net value in this low interest rate economy."

This is a weak form of Bastiat's broken window fallacy in action. You see the money you are losing, but don't consider what higher rates mean for others, like less discretionary money in the economy because more income is going towards car loans, student loans, credit cards, mortgages. There could even be less entrepreneurship occurring due to the higher hurdle rate. Have you included this in your net value calculation?

You don't "deserve" to earn more interest on your CD any more than I "deserve" to pay less interest on my mortgage.

0 comments

3 comments · 1 top-level

collyw11y ago· 2 in thread

The UK is pretty much copying the US with low interest rates. It was recently reported that since 2007, the richest thousand people in the UK have doubled their net worth, while normal people are suffering austerity.

My assumption is that they haven't worked twice as hard. And as the UK economy isn't really picking up, they clearly haven't added double the value to it.

gutnor11y ago

Low interest rate are good thing for normal people. Normal people do not make significant amount of money from the interest of their savings, at least not enough to offset the cost of the money they need to borrow for their mortgage, car/student/credit car loans, ...

The only problem that may have caused in the UK is making the ISA account look less attractive, which could impact the rate people save. (the money you put on your ISA is 'locked away', which mean you are less likely to spend it)

runamok11y ago

> It was recently reported that since 2007, the richest thousand people in the UK have doubled their net worth.

Based on the rule of 72 (https://en.wikipedia.org/wiki/Rule_of_72) that sounds about right for that time frame. 72 divided by 8 years is 9% per year.

Keep in mind that wealth is probably mostly on paper and could disappear just as easily.

j / k navigate · click thread line to collapse