Rant: If you think 50 year mortgages is debt slavery, you don't understand money \ stacker news ~econ

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Rant: If you think 50 year mortgages is debt slavery, you don't understand money

2897 sats \ 63 comments \ @SimpleStacker 12h econ

I noticed that a lot of people on the right, hostile to the banking system, reacting badly towards the proposed idea of 50 year mortgages. They criticize it as being a boon to the banks and prolonging debt slavery.

IMO, as a bitcoiner, I am happy to take on a 50 year mortgage. Someone is essentially lending me worthless, depreciating assets (dollars) so I can use it to buy a valuable, appreciating asset (a home). Moreover, my repayment of the loan is denominated in terms of the worthless asset, so the real value of that loan is only going to go down over time.

If someone is willing to offer this to me, I don't consider myself enslaved. I consider myself lucky that someone would take the other side of that deal!!

In fact, a 50-year fixed rate mortgage (assuming it's fixed rate) probably wouldn't exist in the free-market without some sort of government backing. That should tell you that this is actually a good deal for the borrower, and not a good deal for the lender. The only reason lenders would do this is if they can offload the risk to someone else, i.e. the taxpayer.

So -- if you want to oppose 50 year mortgages, fine. But oppose it for the right reasons. Oppose it because it is a subsidy whose cost is borne by taxpayers; don't oppose it because you think it's debt slavery or a boon to banks. It's actually a boon to the borrower, and you can bet lots of savvy rich people will take advantage of it.

Why do I react so strongly about this? Because I see that this is how plebs keep themselves under the oppression of the fiat monetary system, because they don't understand finance. When I see people try to pay off their mortgages early, so they can own their home "free and clear", despite the mortgage being lower interest than what they could earn elsewhere, I shake my head. You've been given a great opportunity to denominate your debts in a rapidly devaluating asset, yet you decide to forgo the opportunity to acquire appreciating assets in order to pay down this nominal debt. It's the opposite of what rich people do, which is load up on debt to acquire assets. Stop falling for this! Realize that nominal debt denominated in dollars is debt that slowly disappears over time without you doing anything, and make smarter financial decisions.

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30 sats \ 0 replies \ @martinbarilik 2h

100% agree with the title, imagine paying 50 years FIXED mortage 45 years from now with current 10 % real inflation. I am pretty sure you'd be laughing at amount of montly payment :D and should consider yourself lucky if you were able to buy a lunch with it ...

ps. but we shouln'd be incentivize people to take mortages in first place, you should buy what you can afford with money you have - this is what is fundamentally wrong with society today and maybe this is what slavery is meant to be ( or at least one side of it ) in people you mention, 99 % of people are slaves in that regards and almost noone has savings

626 sats \ 8 replies \ @freetx 12h

When I see people try to pay off their mortgages early, so they can own their home "free and clear", despite the mortgage being lower interest than what they could earn elsewhere, I shake my head.

Financially that is true, but there are other factors at play. When I was in my 30s I hit a big payday and paid off my house note - against the advice of CPA for exactly the reasons you mention. I was paying 4% interest and earning ~10%.

However, paying off the house afforded me something else: Complete freedom. I had no car notes, no house note. I only had to worry about food + electricity (both very minor expenses). I already very ample savings...so all in all it meant I was basically "retired". That is, I had complete freedom in what projects to choose to work on and which I didnt care for.

The result was, in the long run, I made much more money then I otherwise would've. I could turn down the "safe time-suck projects that made reliable income" and instead focus on longer term projects that may return nothing or might return a big hit. It was ok if I went 5 months with little to no income, because I had little to no expenses.

As a result, I wound getting involved getting an equity stake in a business that otherwise I wouldn't be able to do. That equity stake has continued to pay me for the last 20 years a monthly dividend.

27 sats \ 5 replies \ @SimpleStacker OP 12h

The thing is, since you hit a big pay day, you could have done everything you did without paying off the house note.

Maybe, psychologically, you couldn't have. But it would have been a mental barrier, not anything related to actual resources which would have constrained you.

142 sats \ 4 replies \ @freetx 12h

Maybe, psychologically, you couldn't have.

Thats right. But taking big risk are themselves rooted psychological issues. I had a wife + infant at home, so its one thing to take risk when you are single, but it becomes much more intense psychological / emotional pressure when you are taking big risk with your family well being at stake.

18 sats \ 3 replies \ @SimpleStacker OP 12h

Yeah, that's fair, and a totally understandable situation. I just think too many people make these choices in an uninformed way, thinking that paying off debt early is always good without really thinking of the implications.

148 sats \ 2 replies \ @ken 11h

The number of people severely affected by overwhelming consumer debt far exceeds those who are actively making extra debt payments using strategies that are not the most mathematically optimal. People should generally be wary of debt, imo.

20 sats \ 1 reply \ @SimpleStacker OP 10h

It's not just about mathematical optimality. It's about the realization that everything fiat, including your debts, are illusory and constantly devaluing.

You're right though about consumer debt. That's why it's important to distinguish between taking on debt in order to finance temporary pleasure, versus taking on debt in order to buy real assets.

41 sats \ 0 replies \ @ken 9h

I appreciate this perspective, I really do. I have an easier time seeing USD as an illusion than I do USD-based debts. But you're right, they are both illusory and constantly devaluing.

10 sats \ 0 replies \ @j7hB75 11h

You still have property tax and home owners insurance to deal with after you pay off your home. These are often overlooked when lumped in with the monthly mortgage payment.

0 sats \ 0 replies \ @unboiled 4h

However, paying off the house afforded me something else: Complete freedom. I had no car notes, no house note. I only had to worry about food + electricity (both very minor expenses).

Second that. It does something with you, and made us realize the grass is indeed greener this side. Our monthly nut is so low, it feels like cheating.

One thing I can add from our perspective is that we don't need leverage. Taking out loans would just tie us more to fiat land. Simply saving our surplus in BTC is enough for us to retire well. No need to add risk to pick up more sats in front of a steamroller.

30 sats \ 0 replies \ @siggy47 5h

100% agree.

40 sats \ 1 reply \ @thecommoner 7h

WTF - I get the idea but No…just No

0 sats \ 0 replies \ @SimpleStacker OP 7h

Why?

55 sats \ 6 replies \ @Undisciplined 12h

Unpacking this a bit more, banks will offer these because taxpayers (who largely overlap with homeowners) are assuming the unacceptable financial risks rather than the banks. So, 50-year mortgages are probably not a good deal for homeowners in aggregate and are a good deal for banks.

What they are is good for individual homeowners, who have no power over the policy environment.

42 sats \ 5 replies \ @SimpleStacker OP 12h

I agree. As housing policy, it's terrible, and distortionary as all gov't interventions are. Though, I do think it will be a windfall for incumbent homeowners, who will see their house prices rise.

But my point is more that it's actually a really good deal for borrowers. I would take it in an instant (assuming an attractive fixed rate), as I believe most bitcoiners should, if you actually believe that monetary inflation will continue unabated.

30 sats \ 0 replies \ @Undisciplined 12h

I'll be lining up for one of these too, but only because I have no power over whether I'm forced to assume the banks' lending risk as a taxpayer.

0 sats \ 3 replies \ @unboiled 4h

As housing policy, it's terrible, and distortionary as all gov't interventions are. Though, I do think it will be a windfall for incumbent homeowners, who will see their house prices rise.

For me, it rhymes a bit too much with Clinton's National Homeownership Strategy which was arguably a considerable contributing factor to the subprime mortgage crisis.

All to say the windfall may only be temporary. And as with all government windfalls, it will be paid for by other people, if not today, then at some point in future. In that sense, being excited about a government-induced windfall is about as "boomer" as it comes.

0 sats \ 2 replies \ @SimpleStacker OP 3h

I'm not excited about it. In fact I would vote against 50 year mortgages.

I just think people are getting mad for the wrong reasons, and those wrong reasons betray their lack of monetary understanding which is how they get taken advantage of by the rich

You can be sure that the already wealthy will be lining up to take these 50 year mortgages

30 sats \ 1 reply \ @unboiled 2h

I'm not excited about it. In fact I would vote against 50 year mortgages.

I apologize, that wasn't aimed at you. Just a general statement.

I just think people are getting mad for the wrong reasons, and those wrong reasons betray their lack of monetary understanding which is how they get taken advantage of by the rich

I'm unable to connect the dots on how not being in debt is allowing the rich to take advantage of precisely those people.

You can be sure that the already wealthy will be lining up to take these 50 year mortgages

I'm not convinced lining up for those loans is an indicator of wealth yet. It sounds as if your struggling Joe would be at least as excited about them, maybe even more.

21 sats \ 0 replies \ @SimpleStacker OP 2h

I'm unable to connect the dots on how not being in debt is allowing the rich to take advantage of precisely those people.

Maybe "taken advantage" isn't quite the right word here. But it's one of the ways in which the rich get richer faster, because they take more advantage of nominal debt to acquire real assets.

I see too many people in my own social circles who are very anti-debt, which is fine if it was an informed point of view, but it's usually not--they're just taught to be afraid of debt, not because it's a decision made with an understanding of the tradeoffs.

IMO the way you think about this stuff matters, because it bleeds into policy. For example, I don't support the 50 year mortgage because the risk is borne by the taxpayers; not because it's a bad deal for the borrower. If you make it about being a bad deal for the borrower (which it's not), then you miss the more important objection.

I'm not convinced lining up for those loans is an indicator of wealth yet. It sounds as if your struggling Joe would be at least as excited about them, maybe even more.

They'll be lining up for different reasons. The struggling Joe lines up because the 50 year mortgage is the only way he'd be able to afford the monthly payments on the house. The rich guy lines up because he knows that it's a great deal to extend nominal fixed rate debt out for 50 years.

107 sats \ 2 replies \ @fishious 10h

0 sats \ 0 replies \ @kepford 9h

0 sats \ 0 replies \ @SHA256man 10h

brilliant, funny interjection in a saloon of upset opposing factions ))

41 sats \ 2 replies \ @SwapMarket 9h

Until you lose your job, and then a house. Moving to another city or country to find another job will be much harder compared to if you rented. That's freedom vs slavery.

0 sats \ 1 reply \ @SimpleStacker OP 8h

you're right, better to own nothing and be happy

0 sats \ 0 replies \ @SwapMarket 38m

Store your wealth in Bitcoin

30 sats \ 1 reply \ @DP0604 9h

Your point of view is quite interesting. Although I don't live in the United States, I'm South American, and I really enjoy these topics. I hope we can continue interacting and discussing this. So, can a young person in the United States buy a house?

0 sats \ 0 replies \ @SimpleStacker OP 8h

can a young person in the United States buy a house

yes but it's not easy, and it's getting harder than it used to be especially in the big cities

96 sats \ 0 replies \ @Scoresby 12h

Oppose it because it is a subsidy whose cost is borne by taxpayers

Yes, sir! Spot on with this.

64 sats \ 1 reply \ @SHA256man 10h

cracks knuckles

y'all already know what Jesus wud say; actually, he wud whip the usury class's asses;

@plebpoet how are my phonetics?

21 sats \ 0 replies \ @plebpoet 10h

really awesome, im inspired tbh

51 sats \ 1 reply \ @88b0c423eb 10h

fractional reserve is always and everywhere fraud. If you think fraud is fine you're not a bitcoiner.

0 sats \ 0 replies \ @SimpleStacker OP 10h

i assume you have no bank accounts

51 sats \ 13 replies \ @DarthCoin 11h

as a bitcoiner, I am happy to take on a 50 year mortgage

If you take a mortgage you are NOT a bitcoiner. You are just a fiat normie.

0 sats \ 12 replies \ @SimpleStacker OP 11h

no bitcoiner is pure enough for you Darth

21 sats \ 0 replies \ @SHA256man 10h

the purity test gets harder the more tests u pass; that is why no one is willing to bust their ass as hard as Darth; weak broken men have no chance to raise themselves or others;

0 sats \ 10 replies \ @DarthCoin 1h

If someone is willing to offer this to me, I don't consider myself enslaved.

No, is not about purity. You are contradicting yourself in this post. You said that fiat is worthless but in the same time you are willing to accept it in exchange for your hard work of 50 years. Is not that slavery? Don't you work for nothing? You said that people don't know what is money, but with this post you demonstrate that you have no idea what is money and especially what is debt, credit, bitcoin, fiat.

When I see people try to pay off their mortgages early, so they can own their home "free and clear", despite the mortgage being lower interest than what they could earn elsewhere, I shake my head.

That's how Saylor is thinking because he have the printer machine backing him...

Let me put it more simple for you:

As a bitcoiner you are a creditor (you spend from what you have, from savings, from your bitcoin) As a fiat normie (aka slave) you are a debtor (you spend from what you do not have, constantly creating more debt and slavery).

Stop demanding more fiat, for more you demand, more enslaved you are. A real bitcoiner will never take any mortgage... will just buy the house with sats. And if you still do not have enough sats for a house, that means you still have to work hard and save more money than you spend. If you want to be a bitcoiner: NEVER GO INTO DEBT.

0 sats \ 9 replies \ @SimpleStacker OP 1h

The relevant comparison is that I would be willing to exchange my hard work of 30/50 years for a home.

It just so happens that the seller of the home wants these worthless papers... and somehow the bank is willing to give me these worthless papers. And, somehow, even more strangely, the bank is willing to say, "Just give us these papers back in 50 years, plus a few more."

But the truth is, no bank would actually offer that. Because even they know how worthless these papers will be in 50 years. The only reason they would accept it is because gov't says "we'll buy it from you!", and then implicitly, "Oh and if things go badly, the taxpayers will bail us out."

So: just to be clear-- I don't support these 50 year mortgages, as policy. Since it is just more gov't distortions of the market.

I am only saying that if you believe dollars are trash, then you should also believe dollar denominated debt is trash. So why should I feel enslaved if all I need to give back is trash?

0 sats \ 8 replies \ @DarthCoin 56m

How many times I have to post this image from a central bank website?

They say clearly how they create money out of nothing. You, with your own signature, you are creating those money. Then comes the question: if you can create money with just your signature, why do you work hard anymore?

0 sats \ 7 replies \ @SimpleStacker OP 48m

Actually, that's exactly my point. Because of how fiat gets created out of nothing, in 50 years the mortgage payment on a 50-year mortgage will be worth almost zero labor hours of work. Probably can pay the whole monthly payment with less than a day's work. By taking the 50 year mortgage you are getting in on the game, despite not having direct access to the money printer.

I'm not saying I like this system, or support it. I actually want to get rid of it, which is why I support Bitcoin. Getting rid of these games would create a more free and just economic system.

But it is also the reality. And the money printing is going to happen whether I like it or not. I would not fault someone for taking advantage of the system where they can. I also would not fault anyone for opting out of the system and just walking away. Both are options.

More important is that you see the system for what it is and recognize its unjust nature

0 sats \ 6 replies \ @DarthCoin 42m

in 50 years the mortgage payment on a 50-year mortgage will be worth almost zero labor hours of work.

So you agree that you worked for nothing. So why did you spend that energy (for nothing) in the first place? You are literally supporting the fiat system that you despise so hard...

0 sats \ 5 replies \ @Scroogey 35m

Darth, the citadel you're building, did you acquire that piece of land by paying for it, and having it registered in the land registry?

Or you're a squatter and plan on defending it with weapons yourself?

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30 sats \ 1 reply \ @0xbitcoiner 12h

What happens if someone dies before they finish paying off the loan?

44 sats \ 0 replies \ @SimpleStacker OP 11h

Under normal circumstances the heirs of the property will also assume responsibility for the loan. If they don't want to make payments they'll typically sell the property and pay off the loan.

30 sats \ 1 reply \ @BeeRye 11h

"In fact, a 50-year fixed rate mortgage (assuming it's fixed rate) probably wouldn't exist in the free-market without some sort of government backing."

No chance in hell there would be one. That's the same story for the 30-yr fixed, we currently have a nationalized mortgage scheme that started out quasi-private 50+ years ago but never was a product available in the wild (and still is not except in the US).

And you are right, this is a good trade IF you are OK with the risk of a structural housing re-price down. In that case, u might be fucked (devil will be in the details of the note developed for such a product).

0 sats \ 0 replies \ @SimpleStacker OP 11h

if you think money supply inflation will continue unabated, it's unlikely that housing will have a long-term reprice downwards. that's what I mean when I say bitcoiners should be relatively happy to take on nominal debts. If you think currency will keep getting debased, nominal debt will just keep shrinking in real value terms

30 sats \ 2 replies \ @j7hB75 11h

Moreover, my repayment of the loan is denominated in terms of the worthless asset, so the real value of that loan is only going to go down over time.

Are you talking about fiat being an asset here? Confused by your wording.

When I see people try to pay off their mortgages early, so they can own their home "free and clear", despite the mortgage being lower interest than what they could earn elsewhere, I shake my head.

What’s wrong with that when you can funnel the extra fiat towards other appreciating assets and stores of value?

0 sats \ 1 reply \ @SimpleStacker OP 11h

Yes, I am talking about the dollar like an asset. It's something you hold that retains value over time (in this case, it retains value poorly)

Paying off nominal debts early is like paying off a debt that slowly disappears on its own over time, due to currency devaluation.

0 sats \ 0 replies \ @j7hB75 5h

Looking at this another way, paying off nominal debts with Bitcoin now and using the surplus fiat to then stack more sats seems reasonable, no?

30 sats \ 0 replies \ @OT 11h

It would depend on the interest rates and terms of the 50 years. I hear in the US you can get a fixed rate for 30 years. When interest rates are low like 1-3% thats fine. However if it's a variable interest rate that could be risky IMO.

21 sats \ 4 replies \ @leo 8h

Rant: If you think homes are an appreciating asset, you don't understand real estate

0 sats \ 3 replies \ @SimpleStacker OP 8h

The structures aren't but the land (usually) is. especially in an environment of rampant monetary debasement

0 sats \ 1 reply \ @leo 1h

Even the land is a huge bet on future policy, demographics and city development. Almost all of Japan is still cheaper now than it was in the 90s

0 sats \ 0 replies \ @SimpleStacker OP 1h

Fair. Nothing is certain. But if offered a choice would you rather accept US dollars or land?

0 sats \ 0 replies \ @j7hB75 5h

The land you basically don’t really own. Property taxes, eminent domain, etc.

0 sats \ 0 replies \ @Solomonsatoshi 1h

It is the US government that is offering this subsidy. The US government that is owned by the bankers. The US government that is only viable as long as they can keep the dying USD/petrodollar monetary hegemony running. Its dying. The productive economic advantage is now hugely in Chinas favour. The USA cannot even fight a war of any scale in the next decade without the supply of rare earths that China now monopolises. A 50 year USD mortgage on US property is not a good bet. The USD has less than a decade at best left as the dominant global currency. The US property market will implode with the collapse of the USD.

0 sats \ 0 replies \ @Solomonsatoshi 1h

Homes/real estate have been appreciating in value since the late 1980s when interest rates were in high double digits. At Covid the rent on debt hit zero or close to it, in some cases going negative. The price of fiat money cannot go any lower and is likely to stay around 2-6% therefore the mechanism that drove the constant increase in real estate prices ( the constant lowering of the price of debt) is no longer operational and is unlikely to be again in the foreseeable future. Because the price of debt cannot increase much or it would trigger mass default, and the price of debt cannot lower much because it would make fiat banking unviable. This we enter an ear where house/property prices are very unlikely to continue to rise as they did from the late 1980s until Covid. Property prices are most likely to be stagnant or to decrease. There is no room for them to be pumped up much more with more debt leverage. The banks will be desperate to find any new ways to wring a little more rentseeking out of the dying fiat debt leveraged property bubble. 50 year mortgages is just such bait. Buying a home now using a 50 year mortgage is risking enslaving yourself to probable negative equity and debt slavery. Do not do it unless you really must and are aware of the risks.

0 sats \ 0 replies \ @Solomonsatoshi 4h

Only in the USA can you get these 30 year mortgages at a fixed rate of interest.

All other countries it is variable rates with fixed rates only available up to a max of 5 years.

Most other developed nations are monetarily and militarily subservient tribute states to the US Empire.

Access to fixed rates for 30 plus years is an exceptional privilege only available to citizens of the US- but the US global military/monetary hegemony is unlikely to remain for more than another decade and certainly not 3-5 decades.

China already has won the trade war -USA cannot fight a war of any size without rare earths and China holds a near monopoly on their supply for the next decade at least.

Enjoy your exceptional privilege while you can but do no count on it being around in another 30 years.