Companies do not pay off loans as fast when the interest rates are kept low by central banks in an effort to stimulate the economy. The same applies to governments who see low interest rates as an opportunity to invest in their economy.
Also, housing prices are way up, fed by cheap loans that allow people to buy those houses that they could not effort when interest rates would be sitting at normal market levels.

We live in a world that's increasingly manipulated by the financial "system" which is why we see these bubbles blow up and eventually pop. We have learned nothing from the 2008 crash

This post was edited by Djunior on Mar 12 2020 12:39pm

Assets are a lot more fairly valued now than they were in 2008. People point to the stock market as proof that asset prices are out of control but in PE terms it's way lower. Interest rates are still a lot higher in the US than the rest of the developed world despite being far higher pre recession. I'm not trying to paint a rosy economic outlook, I'm just saying this is nothing like the subprime loan crisis in severity.

I guess it all boils down to the trust people have in the system. With all that money printing going on this trust comes under pressure. After all, money = labor right. Free money does not exist, people would not feel the need to go to work if that was the case

Yes and no.

We have a lot of bubbles that can definitely blow up. Housing for one. However, one thing we learned from 2008 is that economic systems are arbitrary, and as long as the public doesn't revolt you can keep propping up a system that otherwise wouldn't function.

I mean, our system is undeniably working. It has produced a great increase in material wealth over the past decade and beyond, even if the structural problems still exist.

We can make some changes, but the system is arbitrary and so you can indefinitely prop it up as long as everybody is willing to play along.

When a lot of that material wealth is financed by loans that can simply get re-financed then there is something wrong indeed. Back in the day, when interest rates were high, people were motivated to pay off their debt quickly. And don't forget that people were also motivated to save money because banks payed decent interest over savings.

That is a healthy system that actually works. Compare to today's financial system that creates huge bubbles of debt. People don't save up because why should they.

This post was edited by Djunior on Mar 12 2020 01:17pm

that's half true. its easy to get money today in debt, but it's also a necessity. since the earnings are far less than they used to be compared to cost of living.

also the % going to college has skyrocketed creating a whole new category of debt, and institutions have jacked up tuition and costs to defraud people out of money via the banks free money.

its partially people's fault, but i think the blame more realistically lands on corporate pay and financial institutions and colleges.

Here comes 1.5 trillion dollars!

Welcome to socialism my friend! Just as Marx predicted 153 years ago.

This post was edited by inkanddagger on Mar 12 2020 02:03pm

I hope this money is here to save lives and not to overpay hospitals

Hah, you're only proving my point. Living has become more expensive because financial "products" made it possible for people to keep up with the price creep so to speak. Housing market is a great example. If you want to buy a house you need a mortgage. If interest is high then most working people cannot afford to buy a house unless they save up. Enter the world of financial products and lowered interest rates that make it possible for people to buy their own home without saving up. But wait, housing prices go up ^^ Wait, the solution is lowered interest rates or another financial product that somehow magically ensures the mortgage. And so on