What the bond market is telling us

[FlyerInHi]

[quote=SK in CV]
Undoubtedly there will be inflation sometime in the future. But not any time soon. And there are a whole lot of economists that have been saying that for the last 7 years.[/quote]

What is sometime in the future? After I’m dead?

I’m thinking that not anytime soon means 10 years.

I remember someone said in the near future means 10 years; and in the foreseeable future means 30 years or after I’m dead, or something like that.

I still have an adjustable rate mortgage left over from 1989. Never refinanced… but kept enjoying lowered rates. I was so young back then…

Econprof is saying that “These lower cap rates mean higher asset values now and well into the future.” So while he’s surprised at not seeing hyperinflation, he’s now doing a 180 and predicting low inflation “well into the future.” I’m thinking that means 20 to 30 years.

Low inflation surprised many in the economics profession for the last 7 years, and is now expected to continue well into the future. So, from a policy perspective, it seems like a colossal missed opportunity to get growth higher to 4% and get 15 million more people at work. We are all the poorer for it.

economics as a science improved so much so why has the profession been so wrong? And the economists who were right were not successful in pushing for policy action.

[FlyerInHi]

[quote=joec]A bigger boost IMO would be, say just refinance everyone who hasn’t yet for free to a lower rate with no credit check if they are already current on their mortgage. I know it’s impossible, but it’d help me (I’m selfish) and that’d free up money (self employed)…

Oh well, will revisit this area in 10 years to see where rates are still. :)[/quote]

Makes perfect economic sense to free up money to be spent in the general economy… Millions of homeowners cannot refinance but they have been current on their mortgages.

But that would be abrogation of contract.

lenders are happy to collect the money, just like you’d be happy to have a low rate mortgage in a high rate environment.

[CA renter]

[quote=EconProf][quote=FlyerInHi]What about deficit spending and money printing. Will they not cause hyperinflation as some have predicted?[/quote]
So far, no, to the surprise of all of us.[/quote]

The only people who are surprised by it are the supply-siders. Those of us who understand the reasons behind our economic malaise aren’t surprised at all.

But to say that inflation hasn’t occurred at all is wrong, IMHO. We’re just seeing it in asset prices and other non-productive “investments,” and it’s much higher than stated CPI would suggest. What would prices be like if the government and central bank hadn’t been intervening all these years? The difference between that and today’s prices is where your inflation lies.

[Jazzman]

[quote=FlyerInHi]

economics as a science improved so much so why has the profession been so wrong? And the economists who were right were not successful in pushing for policy action.[/quote]

That is the trillion dollar question. There is seems to be an infinite number of unexpected variables.

[Author]

Posts