The Fed's Bond Bubble Doomsday Machine

[g5000]

This is eye-popping, holy-shit-we're-fucked news.

no idea why you think negative interest rates are so bad?? Can you tell us??

Seriously? Did you learn nothing from the housing bubble?

 

[EdwardBaiamonte]

This is eye-popping, holy-shit-we're-fucked news.

no idea why you think negative interest rates are so bad?? Can you tell us??

Seriously?

no idea why you think negative interest rates are so bad?? Can you tell us??

 

[g5000]

This is eye-popping, holy-shit-we're-fucked news.

no idea why you think negative interest rates are so bad?? Can you tell us??

Seriously?

no idea why you think negative interest rates are so bad?? Can you tell us??

Wow.

First, it punishes savers.

Second, it encourages self-destructive borrowing. Borrowing which puts consumption ahead of growth.

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

Do you not understand the nature of bubbles? Please read the OP. Slowly. Until you get it.

Negative interest rates are unprecedented. This is a HUGE bubble. Interest rates dropping through the floor are the same thing as housing prices going through the roof. It's an asset bubble. Bonds instead of houses.

The Fed is trying to pull demand forward from the future. They have been doing this for eight years now, and this will catch up to us sooner or later.

 

[EdwardBaiamonte]

The Fed is trying to pull demand forward from the future. They have been doing this for eight years now, and this will catch up to us sooner or later.

actually, the Fed just tightened, meaning interest rates are going up not down and the low artifical interest rates have caught up with us and with Japan and so we have 2% GDP thanks to significant mal-investment.

 

[EdwardBaiamonte]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

 

[g5000]

The Fed is trying to pull demand forward from the future. They have been doing this for eight years now, and this will catch up to us sooner or later.

actually, the Fed just tightened, meaning interest rates are going up not down and the low artifical interest rates have caught up with us and with Japan and so we have 2% GDP thanks to significant mal-investment.

The Fed "tightened" by one quarter of one percent!

And the article I linked about putting negative interest rates on the table was written just a few days ago. AFTER the "tightening".

 

[g5000]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

 

[EdwardBaiamonte]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

you said it could not be absorbed!! I'm unaware of any Fed policy that cant be reversed!!

 

[EdwardBaiamonte]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

they are also thinking about raising interest rates twice this year!! that is their stated plan!!

 

[EdwardBaiamonte]

The Fed "tightened" by one quarter of one percent!

and the plan was to do that 4 times this year alone

 

[g5000]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

they are also thinking about raising interest rates twice this year!! that is their stated plan!!

No, that is not their stated plan. They never state what they are going to do until just before they do it.

 

[EdwardBaiamonte]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

they are also thinking about raising interest rates twice this year!! that is their stated plan!!

No, that is not their stated plan. They never state what they are going to do until just before they do it.

wrong she has said that the plan is to "normalize rates". The plan was 4 increases this year, now 2. In any case it is certainly not negative interest rates!!

 

[g5000]

Third, it is the massive printing of money which will in no way be able to be absorbed when the time comes to beat back inflation.

I'm unaware of any Fed policy that cant be reversed!!

Exactly. The article about negative interest rates is a signal they are thinking about reversing their quarter of one percent "tightening".

they are also thinking about raising interest rates twice this year!! that is their stated plan!!

No, that is not their stated plan. They never state what they are going to do until just before they do it.

wrong she has said that the plan is to "normalize rates". The plan was 4 increases this year, now 2. In any case it is certainly not negative interest rates!!

The Fed has put negative interest rates on the table. You can be sure they won't raise rates.

Here's a number for you: There are currently $6 TRILLION worth of negative interest rate bonds being traded in the market right now. We went from 0 to 6 trillion in just two years.

This isn't theoretical shit. This is happening right now.

That's like a house that was worth $100,000 now selling for $1 million.

When inflation starts to move interest rates up, who is going to be wanting left holding a negative interest rate bond? Hmmmmm?

 

[g5000]

The global market for negative debt has gone from zero to $6 trillion in less than two years

The market for negative-yielding bonds is now worth around $6 trillion, and has doubled in just over a month, showing just how worried how investors across the globe are about the state of the world's economy.

Bubble!

 

[g5000]

Fast FT

 

[g5000]

Just like the last bubble, this one is GLOBAL.

The US, the ECB, the BOJ...

BlackRock: Negative interest rates 'new toy' around world

 

[g5000]

From that last link:

The Fed may not be thinking about negative rates for the U.S., but wants to be prepared just in case. The central bank's annual stress test is asking banks to examine the possibility of negatively yielding Treasury rates.

 

[g5000]

A negative interest rate means you are STARTING from an underwater position if you buy one of these toxic pieces of shit.

I can't even begin to imagine the hundreds of trillions of dollars in nominal values of interest rate swaps that are piggybacked on this disaster.

 

[EdwardBaiamonte]

When inflation starts to move interest rates up, who is going to be wanting left holding a negative interest rate bond? Hmmmmm?

dear, the world holds trillions in low or negative interest rate debt that will slowly change in value as inflation or deflation occurs. Fools have been waiting for inflation in Japan for 25 years now. American libertarian fools have been waiting for it here for 9 years, What does that teach you?

 

[EdwardBaiamonte]

A negative interest rate means you are STARTING from an underwater position if you buy one of these toxic pieces of shit.
.

institutions that buy them are smarter than you think. I would not lose a moments sleep if I were you.