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patientrenter
ParticipantI think you’ve received good advice to put a portion in at current lows, and wait to see what to do with the rest.
ParticipantI think you’ve received good advice to put a portion in at current lows, and wait to see what to do with the rest.
ParticipantI think you’ve received good advice to put a portion in at current lows, and wait to see what to do with the rest.
Participantarraya,
I only post late at night, so I apologize if this response to your post is repetitive – I can’t recall the last late-night ‘conversation’ I had with you.
Picking on Paulson or some other financial intermediaries as the root cause of this mess is probably not correct. I think history will show that it was millions upon millions of homeowners who wanted to ‘save’ for retirement using a free lunch method – borrowing other people’s money and using it to buy assets that only increase in price – that drove the madness of the last 5 years.
In truth, I think baby boomers looking for the free lunch way to save for retirement are the root cause of our repeated asset price bubbles in the last 10 years. Unfortunately, they are a big enough group to vote the Congress that accommodates them, and the Administration that accommodates them. All the other groups (mortgage brokers, investment bankers, regulators, real estate agents, stockbrokers etc.) are just following the money incentives to please the boomers.
I could be wrong, but I think we’ll only know for sure when history is written 20 or more years from now.
Participantarraya,
I only post late at night, so I apologize if this response to your post is repetitive – I can’t recall the last late-night ‘conversation’ I had with you.
Picking on Paulson or some other financial intermediaries as the root cause of this mess is probably not correct. I think history will show that it was millions upon millions of homeowners who wanted to ‘save’ for retirement using a free lunch method – borrowing other people’s money and using it to buy assets that only increase in price – that drove the madness of the last 5 years.
In truth, I think baby boomers looking for the free lunch way to save for retirement are the root cause of our repeated asset price bubbles in the last 10 years. Unfortunately, they are a big enough group to vote the Congress that accommodates them, and the Administration that accommodates them. All the other groups (mortgage brokers, investment bankers, regulators, real estate agents, stockbrokers etc.) are just following the money incentives to please the boomers.
I could be wrong, but I think we’ll only know for sure when history is written 20 or more years from now.
Participantarraya,
I only post late at night, so I apologize if this response to your post is repetitive – I can’t recall the last late-night ‘conversation’ I had with you.
Picking on Paulson or some other financial intermediaries as the root cause of this mess is probably not correct. I think history will show that it was millions upon millions of homeowners who wanted to ‘save’ for retirement using a free lunch method – borrowing other people’s money and using it to buy assets that only increase in price – that drove the madness of the last 5 years.
In truth, I think baby boomers looking for the free lunch way to save for retirement are the root cause of our repeated asset price bubbles in the last 10 years. Unfortunately, they are a big enough group to vote the Congress that accommodates them, and the Administration that accommodates them. All the other groups (mortgage brokers, investment bankers, regulators, real estate agents, stockbrokers etc.) are just following the money incentives to please the boomers.
I could be wrong, but I think we’ll only know for sure when history is written 20 or more years from now.
Participantarraya,
I only post late at night, so I apologize if this response to your post is repetitive – I can’t recall the last late-night ‘conversation’ I had with you.
Picking on Paulson or some other financial intermediaries as the root cause of this mess is probably not correct. I think history will show that it was millions upon millions of homeowners who wanted to ‘save’ for retirement using a free lunch method – borrowing other people’s money and using it to buy assets that only increase in price – that drove the madness of the last 5 years.
In truth, I think baby boomers looking for the free lunch way to save for retirement are the root cause of our repeated asset price bubbles in the last 10 years. Unfortunately, they are a big enough group to vote the Congress that accommodates them, and the Administration that accommodates them. All the other groups (mortgage brokers, investment bankers, regulators, real estate agents, stockbrokers etc.) are just following the money incentives to please the boomers.
I could be wrong, but I think we’ll only know for sure when history is written 20 or more years from now.
Participantarraya,
I only post late at night, so I apologize if this response to your post is repetitive – I can’t recall the last late-night ‘conversation’ I had with you.
Picking on Paulson or some other financial intermediaries as the root cause of this mess is probably not correct. I think history will show that it was millions upon millions of homeowners who wanted to ‘save’ for retirement using a free lunch method – borrowing other people’s money and using it to buy assets that only increase in price – that drove the madness of the last 5 years.
In truth, I think baby boomers looking for the free lunch way to save for retirement are the root cause of our repeated asset price bubbles in the last 10 years. Unfortunately, they are a big enough group to vote the Congress that accommodates them, and the Administration that accommodates them. All the other groups (mortgage brokers, investment bankers, regulators, real estate agents, stockbrokers etc.) are just following the money incentives to please the boomers.
I could be wrong, but I think we’ll only know for sure when history is written 20 or more years from now.
ParticipantI think the extreme burst of pessimism last week made recent Treasury yields too low, and now we’re seeing a snap back.
In the longer run, all the private debt that people don’t want to take responsibility for repaying is being converted into public debt. Supply of Treasuries will exceed demand at low rates, and rates will rise.
Be careful, though, because a rise in rates will be opposed by govt, because borrowers don’t want to pay high rates, and more voters see themselves as borrowers than as savers. So we may see a capping of Treasury rates. (After all the new govt intervention we’ve seen in the last year, don’t be surprised at this.) At that point, the dollar will drop. I think the short term chain reaction will stop there, although it’s conceiveable currency controls and “official” dollar exchange rates could be imposed. I doubt things will get that extreme.
In the longer term, the drop in the dollar and very high public spending will create inflation. People will be encouraged to get into fixed rate mortgages before that. When most are in fixed rate mortgages, inflation will be allowed to rise, and all long term fixed interest debt will be thereby devalued. Long treasury rates (including the 10-T) will then rise too.
After the debt is sufficiently devalued, inflation will be extinguished, and the various interest rate and other controls will be pulled back.
Were you looking more for a prediction of 10T 6 months from now, SDR?
ParticipantI think the extreme burst of pessimism last week made recent Treasury yields too low, and now we’re seeing a snap back.
In the longer run, all the private debt that people don’t want to take responsibility for repaying is being converted into public debt. Supply of Treasuries will exceed demand at low rates, and rates will rise.
Be careful, though, because a rise in rates will be opposed by govt, because borrowers don’t want to pay high rates, and more voters see themselves as borrowers than as savers. So we may see a capping of Treasury rates. (After all the new govt intervention we’ve seen in the last year, don’t be surprised at this.) At that point, the dollar will drop. I think the short term chain reaction will stop there, although it’s conceiveable currency controls and “official” dollar exchange rates could be imposed. I doubt things will get that extreme.
In the longer term, the drop in the dollar and very high public spending will create inflation. People will be encouraged to get into fixed rate mortgages before that. When most are in fixed rate mortgages, inflation will be allowed to rise, and all long term fixed interest debt will be thereby devalued. Long treasury rates (including the 10-T) will then rise too.
After the debt is sufficiently devalued, inflation will be extinguished, and the various interest rate and other controls will be pulled back.
Were you looking more for a prediction of 10T 6 months from now, SDR?
ParticipantI think the extreme burst of pessimism last week made recent Treasury yields too low, and now we’re seeing a snap back.
In the longer run, all the private debt that people don’t want to take responsibility for repaying is being converted into public debt. Supply of Treasuries will exceed demand at low rates, and rates will rise.
Be careful, though, because a rise in rates will be opposed by govt, because borrowers don’t want to pay high rates, and more voters see themselves as borrowers than as savers. So we may see a capping of Treasury rates. (After all the new govt intervention we’ve seen in the last year, don’t be surprised at this.) At that point, the dollar will drop. I think the short term chain reaction will stop there, although it’s conceiveable currency controls and “official” dollar exchange rates could be imposed. I doubt things will get that extreme.
In the longer term, the drop in the dollar and very high public spending will create inflation. People will be encouraged to get into fixed rate mortgages before that. When most are in fixed rate mortgages, inflation will be allowed to rise, and all long term fixed interest debt will be thereby devalued. Long treasury rates (including the 10-T) will then rise too.
After the debt is sufficiently devalued, inflation will be extinguished, and the various interest rate and other controls will be pulled back.
Were you looking more for a prediction of 10T 6 months from now, SDR?
ParticipantI think the extreme burst of pessimism last week made recent Treasury yields too low, and now we’re seeing a snap back.
In the longer run, all the private debt that people don’t want to take responsibility for repaying is being converted into public debt. Supply of Treasuries will exceed demand at low rates, and rates will rise.
Be careful, though, because a rise in rates will be opposed by govt, because borrowers don’t want to pay high rates, and more voters see themselves as borrowers than as savers. So we may see a capping of Treasury rates. (After all the new govt intervention we’ve seen in the last year, don’t be surprised at this.) At that point, the dollar will drop. I think the short term chain reaction will stop there, although it’s conceiveable currency controls and “official” dollar exchange rates could be imposed. I doubt things will get that extreme.
In the longer term, the drop in the dollar and very high public spending will create inflation. People will be encouraged to get into fixed rate mortgages before that. When most are in fixed rate mortgages, inflation will be allowed to rise, and all long term fixed interest debt will be thereby devalued. Long treasury rates (including the 10-T) will then rise too.
After the debt is sufficiently devalued, inflation will be extinguished, and the various interest rate and other controls will be pulled back.
Were you looking more for a prediction of 10T 6 months from now, SDR?
ParticipantI think the extreme burst of pessimism last week made recent Treasury yields too low, and now we’re seeing a snap back.
In the longer run, all the private debt that people don’t want to take responsibility for repaying is being converted into public debt. Supply of Treasuries will exceed demand at low rates, and rates will rise.
Be careful, though, because a rise in rates will be opposed by govt, because borrowers don’t want to pay high rates, and more voters see themselves as borrowers than as savers. So we may see a capping of Treasury rates. (After all the new govt intervention we’ve seen in the last year, don’t be surprised at this.) At that point, the dollar will drop. I think the short term chain reaction will stop there, although it’s conceiveable currency controls and “official” dollar exchange rates could be imposed. I doubt things will get that extreme.
In the longer term, the drop in the dollar and very high public spending will create inflation. People will be encouraged to get into fixed rate mortgages before that. When most are in fixed rate mortgages, inflation will be allowed to rise, and all long term fixed interest debt will be thereby devalued. Long treasury rates (including the 10-T) will then rise too.
After the debt is sufficiently devalued, inflation will be extinguished, and the various interest rate and other controls will be pulled back.
Were you looking more for a prediction of 10T 6 months from now, SDR?
ParticipantSomeone mentioned this up above, but I’ll repeat it: beware of any asset price that can be manipulated by govt power. Long Treasury prices can be kept high. It’s the dollar that, in the end, will drop. Short of third-world currency controls, the exchange rate cannot be manipulated as easily as internal US financial instruments.
My personal bet is on the Yen as a safe store of value for the next 5-10 years as inflation is engineered in much of the rest of the world.
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