Negative Interest Rates Implications - deflationary and inflationary

DontMissTheBus · Sep 1, 2011

I think you have a very poor understanding of why foreigners (to US and UK) invest such large quantities of money at these absurdly low yields.

Quote from morganist:

I can't see people investing from abroad anymore if the interest rate is negative

morganist · Sep 1, 2011

Quote from DontMissTheBus:

I think you have a very poor understanding of why foreigners (to US and UK) invest such large quantities of money at these absurdly low yields.

No I think those fundamentals are changing. Just you watch.

DontMissTheBus · Sep 1, 2011

Let me ask you this: why do you think there's a huge foreign demand for US/UK/EU bonds at these absurd levels?

Quote from morganist:

No I think those fundamentals are changing. Just you watch.

morganist · Sep 1, 2011

Quote from DontMissTheBus:

Let me ask you this: why do you think there's a huge foreign demand for US/UK/EU bonds at these absurd levels?

I don't think there is going to be that is the problem. I think the US and UK economy are going to tank soon. If they haven't started already.

DontMissTheBus · Sep 1, 2011

Let me clarify: why do you think there has been (say, this year and last) such a huge demand to US/UK/EU bonds at these absurd yields?

Quote from morganist:

I don't think there is going to be that is the problem. I think the US and UK economy are going to tank soon. If they haven't started already.

morganist · Sep 1, 2011

Quote from DontMissTheBus:

Let me clarify: why do you think there has been (say, this year and last) such a huge demand to US/UK/EU bonds at these absurd yields?

The middle east unrest could have had something to do with it.

DontMissTheBus · Sep 1, 2011

And?? The REALLY big reason for steady foreign appetite over the last few years? The billions and billions that get stashed away at every auction?

Quote from morganist:

The middle east unrest could have had something to do with it.

morganist · Sep 1, 2011

Quote from DontMissTheBus:

And?? The REALLY big reason for steady foreign appetite over the last few years? The billions and billions that get stashed away at every auction?

So what are you saying it is?

DontMissTheBus · Sep 1, 2011

Really? You've been inventing all those macro policy products and you have no idea why there's a huge demand for US government products steadily over the last few years?

Hint: might it have something to do with vast trade surplus that certain countries have built up? Can you complete the remainder of this thought?

Quote from morganist:

So what are you saying it is?

morganist · Sep 1, 2011

Quote from DontMissTheBus:

Really? You've been inventing all those macro policy products and you have no idea why there's a huge demand for US government products steadily over the last few years?

Hint: might it have something to do with vast trade surplus that certain countries have built up? Can you complete the remainder of this thought?

Your theory is not backed up by the facts. In the UK there was a bond strike. The US might be different but that will change.