rates will rebound quickly

[GrayHare]

Whenever they eventually do. That from a study of economic inflationary/deflationary cycles going back some 700 years. The current real-rate deflationary period is the second longest of the past 700 years.

"On aggregate, then, the past 30-odd years more than hold their own in the ranks of historically significant rate depressions. But the trend fall seen over this period is a but a part of a much longer ”millennial trend”. It is thus unlikely that current dynamics can be fully rationalized in a “secular stagnation framework”. Meanwhile, looking at past cyclical patterns, the evidence suggests that when rate cycles turn, real rates can relatively swiftly accelerate."

https://bankunderground.co.uk/2017/...e-1311-renaissance-roots-and-rapid-reversals/

 

[pn3069]

The sovereign debt is the issue: countries will not be able to refinance their sovereign debt when existing bonds mature (which they continue to do). That is the reason the central banks' engineering is here to stay to keep the rates as low as possible but not lower.

We are in uncharted territory with sovereign debt the world over (post 2008 Great Financial Crisis).

Some US debt forgiveness has to occur before rates can go back to their "normal" cycle.

 

[VanWinkle]

When looking at 700 years, I wonder what he considers "relatively quickly accelerate". 1 century, 50 years, a score, a decade, or a year. It would definitely make a difference to those making decisions based on his work. I will not be one of them.

Best to you,

VW

 

[HadEnuff]

When looking at 700 years, I wonder what he considers "relatively quickly accelerate". 1 century, 50 years, a score, a decade, or a year. It would definitely make a difference to those making decisions based on his work. I will not be one of them.

Best to you,

VW

yes...."relatively swiftly"....well...relative to what? A sloth crossing the highway? Relative to 700 years? Faster than a speeding bullet?

The author has certainly put himself wayyy out on a limb with that wording.

 

[97guns]

There has never been the this large a deficit and indebtedness and it is worldwide, several countries running negative interest rates, rising interest rates can not continue

 

[97guns]

Yellen is out and a new Fed is in, we’ll see what happens

 

[USGrant1962]

There has never been the this large a deficit and indebtedness and it is worldwide, several countries running negative interest rates, rising interest rates can not continue

While the trend has been terrible since 2009, the debt was substantially higher during and well after WWII as a percentage of GDP.

US Federal Debt as Percentage of GDP

Same for the deficit.

http://www.multpl.com/u-s-federal-deficit-percent/

That is not to say that I don't think it is a problem, just let's be accurate about it. Especially considering we are at these levels without a world war.

 

[alaska55]

Yellen is out and a new Fed is in, we’ll see what happens

Don't hold your breath Powell voted 100% with Yellen.

 

[pn3069]

Don't hold your breath Powell voted 100% with Yellen.

The new Fed chair will remember which President nominated him... thus a dovish stance is anticipated..

 

[MichaelB]