this post was submitted on 14 Apr 2025
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[–] turnip@sh.itjust.works -1 points 1 week ago* (last edited 1 week ago) (2 children)

Demographics falling is bad because of inflation targeting. Everyone must consume 2% more this year than they did last year, so the money supply must grow dramatically as demographics age and spending slows.

The mortgage then acts as a gatekeeper in our fiat system, by locking up an inelastic good necessary for survival and procreation behind a paywall that scales with low interest rates, and can only be unlocked by taking on a mortgage and completing the payment obligations.  This ensures that the financial system has a steady stream of obligations that help sustain the flow of currency, every new mortgage is new money supply that benefits existing asset holders.

What we need is to get rid of mortgages. People then need to pay cash or rent, no cheap loans, all loans go toward productivity investment and startups. The government can then build high density rentals near mass transit.

[–] Ronno 2 points 1 week ago (1 children)

How will you build wealth without mortgages and just paying cash? Then most people wouldn't be able to afford to buy a home, they would always be slaves to rent. No mortgages plays right into the hand of the wealthy few that can exploit the renters.

[–] turnip@sh.itjust.works 0 points 1 week ago* (last edited 1 week ago)

House prices rise to max out available credit. If that credit vanishes then prices will fall, as people need to save their own money to buy, and they don't benefit from the cantillon effect raising asset values.

House prices are inversely correlated with interest rates, and housing bubbles popup wherever QE is done as a mortgage is a net short position on the purchasing power of cash.