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GREENHEAD22
LSU Fan
Member since Nov 2009
14324 posts

3 more yrs of zero interest
So I fully admit that I am no where near as astute on macro economic and banking as most of you put this just seems like the FED is asking for trouble.

MT gurus please put my mind at ease.



Azazello
Tennessee Fan
Dallas, TX
Member since Sep 2011
2967 posts

re: 3 more yrs of zero interest
quote:

MT gurus please put my mind at ease.


We are in uncharted territory


ynlvr
LSU Fan
Gulf Coast
Member since Feb 2009
3359 posts

re: 3 more yrs of zero interest
Up is Down. In the log run debt will come due. Period.


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131
GREENHEAD22
LSU Fan
Member since Nov 2009
14324 posts

re: 3 more yrs of zero interest
For the USA maybe, this has been tried before, ie Japan and it didn't have good results.


KillTheGophers
Yale Fan
Member since Jan 2016
4404 posts
 Online 

re: 3 more yrs of zero interest
Gold
Preferred Stock

Avoid leveraged companies - their bubble will burst.

Bonds will be hurt at some point when rates start to rise.
This post was edited on 9/16 at 10:05 pm


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21
Dandaman
LSU Fan
Louisiana
Member since May 2017
262 posts

re: 3 more yrs of zero interest
What did japan do? Please explain


CheEngineer
LSU Fan
Louisiana
Member since Aug 2019
1826 posts

re: 3 more yrs of zero interest
quote:

What did japan do? Please explain

For your viewing pleasure.
Japan Lost Decade


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41
arcalades
LSU Fan
USA
Member since Feb 2014
14667 posts

re: 3 more yrs of zero interest
the fed doesn't know what they're going to do 6 months from now, much less for the next 3 years. I wouldn't put much stock into what they say. It's a war; disinformation is more convenient than truth.


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120
RedStickBR
LSU Fan
Member since Sep 2009
13890 posts

re: 3 more yrs of zero interest
My take: Fed is desperate for inflation because they view it as the solution to the ballooning debt and are even more concerned about deflationary forces.

Their asset purchases, forward guidance and interest rate policy might be viewed as inflationary but for weak aggregate demand that is likely to persist much longer than a quick V shaped recovery would have suggested.

Even though inflation would be a brutal tax on the U.S’s aging population, the Fed and short term minded politicians would prefer it to the uncomfortable belt tightening austerity would require.

Thus, rather than do what’s right, they’re doing what they view as expedient. The problem for them is that their policies continue to experience diminishing marginal returns, such that the inflation they wish to create may prove elusive.

If we’re finally forced to take our medicine, that’s likely bearish for stocks, bullish for safe haven assets like government bonds and the dollar, and bad for individuals, governments and companies who have become overly indebted.


schexyoung
LSU Fan
Deaf Valley
Member since May 2008
5888 posts

re: 3 more yrs of zero interest
They have been trying to ramp up inflation for decades with no success.


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Mr Perfect
Lamar Fan
Member since Mar 2010
16586 posts

re: 3 more yrs of zero interest
ubi will get us inflation that we need dude. just you wait dude. coming sooner than later. few understand


RedStickBR
LSU Fan
Member since Sep 2009
13890 posts

re: 3 more yrs of zero interest
I think the chances of deflation are also the highest they’ve been in a while. Some countries are already there or almost there:





This post was edited on 9/17 at 9:06 am


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01
RedStickBR
LSU Fan
Member since Sep 2009
13890 posts

re: 3 more yrs of zero interest
quote:

ubi will get us inflation that we need dude. just you wait dude. coming sooner than later. few understand


When do you expect that to show up in the bond market?


Mr Perfect
Lamar Fan
Member since Mar 2010
16586 posts

re: 3 more yrs of zero interest
dude I'm not bullish on usd or bonds at all. gl w that theory


RedStickBR
LSU Fan
Member since Sep 2009
13890 posts

re: 3 more yrs of zero interest
I wasn’t assuming you were bullish on bonds. You seemed to suggest inflation was coming. If that were obvious, you’d see it in the bond market in the form of higher yields, especially on longer dated bonds. But so far the bond market doesn’t appear to be concerned about inflation in the slightest. Hence my question: when do you expect it to start showing up?


fallguy_1978
LSU Fan
Half mile from St George
Member since Feb 2018
28388 posts
 Online 

re: 3 more yrs of zero interest
It's going to be good for the stock market while it lasts


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11
Mr Perfect
Lamar Fan
Member since Mar 2010
16586 posts

re: 3 more yrs of zero interest
i think fed wants inflation but nothing they are doing is causing inflation to happen. m2 chart says money is not circulating like they want it to be. ppl are nervous right now so that's why I think ubi could come to give ppl confidence that govt will print them a check every month and spend spend spend

two great twitter follows and writers for me are @preston psych and @jeffbooth

price of tomorrow very great book for us thinkers.
This post was edited on 9/17 at 8:52 am


RedStickBR
LSU Fan
Member since Sep 2009
13890 posts

re: 3 more yrs of zero interest
quote:

price of tomorrow very great book for us thinkers.


That does look interesting - thanks.


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LSURussian
LSU Fan
9 acres of paradise in Baton Rouge
Member since Feb 2005
122021 posts
 Online 

re: 3 more yrs of zero interest
quote:

for us thinkers.


wutangfinancial
LSU Fan
Dallas, TX
Member since Sep 2015
4565 posts
 Online 

re: 3 more yrs of zero interest
Careful on the Japanese comparisons. Our QE programs are much different than theirs and Europe.


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