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ThetaGangThroweway OP t1_j1veij3 wrote

Reply to comment by CoffeeMaster000 in Why Interest Rates Should Stay High (ish). by ThetaGangThroweway

We all know the positives, but the whole point is it helps create bubbles. Either way, we could do as you say and keep interest rates at 3-5% for the same correction.

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CoffeeMaster000 t1_j1vhpq4 wrote

Booms and busts are normal economic cycles. It slows down then we'll pick up again.

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ThetaGangThroweway OP t1_j1vjkys wrote

Yes, but we can do it consistently. In fact, every new marketable invention has produced some kind of bubble in recent decades. There are even single-stock bubbles, and bubbles that form around successful companies. Like how right now college athletes found they can make more on OnlyFans than they ever will make in the real world. That isn't just sad, but will definitely right itself as soon as all the small-scale porn shows move onto the platform and squeeze the true amateurs out (fortunately).

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CoffeeMaster000 t1_j1vkqha wrote

lol idk wtf you're talking about, buddy. Very regarded.

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ThetaGangThroweway OP t1_j1vl28j wrote

There are micro-bubbles all the time that depend on ease of equity and cheapness of debt. Ever heard of Amazon Aggregators?

I forget the exact study, but investments with lottery like payoffs tend to be systemically overvalued whether it's micro-cap stocks, short-term options, or innovative startups. People feel better about a chance of extremely high returns than they do about giving that chance up. Until this year, any new business could be given a lottery like payoff (or even be turned into a ponzi scheme).

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