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Advisor

And if the interest rates don't go up?

That seems to be the universal hedge amongst all of the "playaahs" I'd take a $10 bill for every low info guy I've listened to since September '08 who has told me that is pre-destined and really retire to somewhere nice. http://mobile.nytimes.com/blogs/krugman/2014/06/02/for-bonds-this-time-is-different/.
6 Replies
Highlighted
Honored Advisor

Re: And if the interest rates don't go up?

What`s your take on this?  http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/1_The_Shocking_Reality_Of_What_Is... 

 

 

Is it possible the fed thinks it has just developed a new paradigm where they simply won`t raise interest rates, buying their own debt through shell countries such as Begium?    Since the US is the greatest "debtor nation" in the world of all the other debt combined, they can sort of write their own rules. 

 

I guess, be forewarned if that really is their scheme, when this is over, it really is over all the frogs are in the pot getting boiled in the same stew together.  The US dollar worth is only based on what other world currencies are, more hours will have to be worked to buy candy bars that are smaller in the same wrapper. 

 

If that is the idea, "it" will end the day that the workers of the world elect someone on the order of a Stalin.  Interest raise may not ever have to go up.

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Advisor

Re: And if the interest rates don't go up?

Yeah, I'll go to work so as to dodge the brickbats that will come flying but hard to find anybody any wronger than the inflationistas have been recently although they are almost all unfazed.

 

There are a lot of things dragging globally but might be worth noting that the sag in GDP ran concurrently, or actually with the right lag time, with the sharp reduction in the US deficit. If there's a GOP argument that they'd be doing better it is only that they'd be running bigger deficits via Reagan/Bush Keynesianism (tax cuts and defense spending).

 

Pushing on a string, but I don't see the proximate cause of an endgame anywhere in sight (maybe this time it is a black swan, not a monster in plain view).

 

What you do have present is one of the key ingredients to the 2008 crisis. With low yields there is irresistable temptation to reach for higher yields and (generally, regardless, but particularly in the absence of meaningful regulation) a general deterioration of credit quality.

 

Personally I've kind of swung to the camp favoring collapse- I regret not letting it go in fall 2008 (as if I had any say in the matter). But it is exceedingly important whose watch the crackup comes on- note that Clinton managed to dump the tech stock old maid to Bush, Bush very much would have liked to have moved the mortgage paper crisis along.

 

It had to be his greatest disappointment when he was informed by his handlers that he had been chosen as captain of the Titanic. But you have to give his boys a lot of credit for having obscured that fact in the partisan cacaphony.

 

I'm playing a what if scenario with myself. Let's say that things let loose on Obama's watch and the loons take power. There is no doubt that their economic prescriptions will be disasterous but once you've applied the first leech it is a heckuva lot more likely that you'll apply more than it is that you'll decide that it was a bad idea.

 

I guess that's all unknowable and it is also unknowable how much resilience America really has. Maybe it requires that both sides fail before it's all cleaned out. That will be a tough 6-10 years, though, guess I'll have to postpone my Golden Years.

 

BTW, seems pretty well settled that the big rise in Belgium treasury holdings is Chinese flow. Given the fact that they're very aggressively trying to devalue the renmembi it seems reasonable. They have more pressing issues than punishing the US through a treasury dump, which is overplayed as to potential harm anyway.

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Advisor

Re: And if the interest rates don't go up?

Also, among the unkowables I'd add to the scenario that if the current conservative caucus took power following another financial crisis they might actually serve a laudable ultimate purpose.

 

There would be some irony in the fact that they'd apparently think their prescriptions would work but it might lead to a necessary final liquidation of our financial system.

Highlighted
Veteran Advisor

Re: And if the interest rates don't go up?

as active grain farmers, we can store our own "gold" and wait for opportunities to exchange hard assets for other hard assets. 13% corn will keep for a decade with minimum care

 

Highlighted
Senior Contributor

Re: And if the interest rates don't go up?

Great. You can throw the kennels at those pillaging hordes of attacking house invaders or the ravenous communists. Follow it up with a constant bombardment of home made crosses and old bibles. That'll stave them off until the cavalry arrives. Then, and only then, rain down a thunderous cloud of prayers mixed with a plethora of Hail Marys.

Christ your a nut job. Let me know when you reconsider your lies about me and I will cease the truth about you.
Highlighted
Senior Advisor

Re: And if the interest rates don't go up?

Yes, I suggest you try that with minimum care.