negative primes
the rule of thumb used to be to divide your income into thirds. each third is dedicated to: housing, savings, food/clothing/lifestyle. somewhere along the line people started to think of their house as an investment vehicle. and started spending 2/3rds on their house and nothing on savings. the first such folks made a killing. prompting more people to imitate. this was encouraged by the feds when they lowered interest rates. which drives up housing prices. which rewards people who upgraded their homes. and round we go. how long can this run last? heh. it'll last as long as people can devote more of their income to their house and as long as the feds can keep lowering rates. well, people are starting to go broke. and the interest rate is at zero. can it go any lower? well, yes: bailouts. here's a loan. can't pay it back with interest? okay. here's some money. you don't have to pay interest on it. you don't even have to pay it back. so i loaned you $1 trillion dollars. and i'm going to get back $900 billion. that's a negative 10% interest rate. neat huh?