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Home > Forums > The Open Forum
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I'm not an expert, but...

Author: NedoftheHill (44670 Posts - Joined: Jun 29, 2011)
Posted at 2:21 pm on Sep 11, 2019
View All

I will note that I think you mixed up yields and rates in your post. Rates are lower in other countries than in the US, and in some countries (last I looked), there are actually negative rates. So, for example, a corporation can buy German bonds at a negative rate (guaranteed loss if they keep until maturity) or US bonds at a positive rate (guaranteed very low gain if they keep until maturity. So, some transfer their money from euros into dollars (driving up the value of the dollar on the market) and buy US bonds. (Some people are still buying German bonds at negative rates, but I admit I don't get it. I suppose they think that is a safer form of wealth than money deposited in a private bank.)

When the dollar goes higher, Americans can buy more imported products, but it is harder for American businesses to sell abroad. A lower dollar helps American businesses marketing around the world. So, lower rates are good for that. Also, lower rates make borrowing easier...which is good in the short term (so the US markets and presidents of both parties love it) but potentially (almost certainly) bad in the long run.

Yields are a different matter. They are more an indication of confidence in the US, I think? I'll let someone else comment on that.

I think ultra-low rates do fuel a market bubble. I hope the bubble lasts through the next election. Obama was a beneficiary of the housing bubble popping before the 2008 election. Bush didn't make the bubble; both parties allowed it to happen; the timing of the pop possibly affected the election, though. But, make no mistake, any bubble is bad if it gets too big. We had a major money supply bubble build up under Obama (Supported by McCain & Bush), and that has still not been undone.


This message has been edited 2 time(s).

Evil preaches tolerance until it is dominant, then it tries to silence good.

Replies to: "I'm not an expert, but..."

  • Can you smell 27000? Can you smell what the Trumpster is cooking? [IMAGE] - BaronVonZemo - 11:14am 9/11/19 (36) [View All]
    • I thought we smelled this two months ago. - LehighND - 9:22pm 9/11/19
      • Ooooh, that smell... - TakethetrainKnute - 11:37am 9/12/19
      • Take a heapin' helpin' of seconds! There's lots to go around! [NT] - BaronVonZemo - 10:27pm 9/11/19
    • Dude, stop - Nigel Tufnel - 1:28pm 9/11/19
      • Nigel..... - BaronVonZemo - 2:05pm 9/11/19
        • Might as well while we can. The Dems will have us in rail cars soon. [NT] - NedoftheHill - 2:41pm 9/11/19
    • A Trumpster fire, you say? [NT] - Chris94 - 12:20pm 9/11/19
      • There you go! - BaronVonZemo - 2:05pm 9/11/19
    • Meth? - AlbanyIRISH - 11:37am 9/11/19
      • Yeah much like Obama had and the $18 trillion global debt at negative rates. Do you know what that - PBHangingChad - 11:39am 9/11/19
        • I actually think it went from 10 to 20 trillion with Obama when interest rates were having a much - THEISMANCARR - 9:27am 9/12/19
          • You should probably stop posting about these things. - LehighND - 2:45pm 9/12/19
        • So walk me through this - Mark - 1:57pm 9/11/19
          • The Fed auctions off treasuries to meet our debt requirement. They are sold domestically and - PBHangingChad - 6:08pm 9/11/19
            • That's all well and good, but... [NT] [IMAGE] - NedoftheHill - 6:33pm 9/11/19
          • I'm not an expert, but... - NedoftheHill - 2:21pm 9/11/19
            • Rates and yields - Iggle - 4:33pm 9/11/19
              • Well said [NT] - PBHangingChad - 6:11pm 9/11/19
            • About bubbles being bad...really only if you sell. Look if you hung on in 2000 or 2008 - - BaronVonZemo - 2:24pm 9/11/19
              • Agreed. I was thinking more about US business operations. - NedoftheHill - 2:27pm 9/11/19
    • Trump is cooking nothing. The economy drives itself... unless restrained unnaturally. [NT] - Curly1918 - 11:27am 9/11/19
      • Tax cuts work, baby. Every time. [NT] - BaronVonZemo - 2:07pm 9/11/19
        • So cut them to zero... [NT] - LehighND - 9:26pm 9/11/19
          • Oh, I never said no taxes, but after liberals have control, there is always cut backs to be made. [NT] - BaronVonZemo - 10:28pm 9/11/19
        • How's that deficit looking? Oops. Forgot. Obama gone. [NT] - golfernot - 4:30pm 9/11/19
          • See above for debt analysis. Also slow your swing and pose at the finish to help your golf game. [NT] - THEISMANCARR - 9:30am 9/12/19
          • Oops. Forgot. You don't actually care about the deficit. [NT] - NedoftheHill - 5:27pm 9/11/19
            • I think I do and I think you don't. [NT] - golfernot - 10:22pm 9/11/19
              • Oh, I care about it more than any one else on this board. - NedoftheHill - 10:27pm 9/11/19
                • My issue is that the deficit only mattered to conservatives when Obama was Prez. - golfernot - 12:58pm 9/12/19
                  • And my issue is that the deficit only matters to liberals when the GOP has the presidency. - NedoftheHill - 1:22pm 9/12/19
      • Maybe his tax returns... - TakethetrainKnute - 12:12pm 9/11/19
      • How was it restrained during the mortgage meltdown? All those involved in that now criticize Trump - PBHangingChad - 11:35am 9/11/19
        • Requiring banks to lend to poor folk was a form of economic restraint - Curly1918 - 11:52am 9/11/19
          • That took almost 16 years to totally undo the US economy. - NedoftheHill - 2:42pm 9/11/19
    • That’s not important America is focused on sharpies. Come on stay on the important stuff [NT] - PBHangingChad - 11:25am 9/11/19
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