tag:blogger.com,1999:blog-6616959642391988608.post5674475972243210647..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Who's afraid of 1.3%?Scott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-6616959642391988608.post-3273645475716187522016-07-06T23:04:42.057-07:002016-07-06T23:04:42.057-07:00Until a few years ago, the decline in yields could...Until a few years ago, the decline in yields could easily be attributed to the decline in inflation. But now that yields are below the rate of inflation, I think there is something else at work. Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-107490827930837902016-07-06T22:41:17.769-07:002016-07-06T22:41:17.769-07:00"My best guess as to why yields are so low? I..."My best guess as to why yields are so low? It's simply that the market is very worried"<br /><br />Looking at the charts there are obvious downward trends for DECADES now. So, that's because the market has been very worried for decades? Surely there is something more to it.Royhttps://www.blogger.com/profile/09325498485905547125noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-72688904018851658722016-07-06T18:40:21.078-07:002016-07-06T18:40:21.078-07:00Andrew: Slow growth is indeed common in other coun...Andrew: Slow growth is indeed common in other countries, but I note that those countries share the same burden as the US: very high tax rates, very burdensome regulations, high levels of government spending relative to GDP, high levels of transfer payments. The US has become more European-like under Obama, and it shows. Japan is notorious for its high level of government spending and its Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-74646381775791956872016-07-06T17:38:38.349-07:002016-07-06T17:38:38.349-07:00I suspect lower interest rates ahead.
The US Fed...I suspect lower interest rates ahead. <br /><br />The US Federal Reserve probably won't go back to QE. Rates have been falling under the current regime. The globe is awash with capital. Why should rates rise?<br /><br />The lessons of Takahashi Korekiyo, Japanese central banker in the Great Depression, are worth pondering.<br /><br />To be sure, less taxes and regulations. Eliminating Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-61388230392722148342016-07-06T17:22:36.785-07:002016-07-06T17:22:36.785-07:00Scott;
It is tempting to blame Obama for slow gro...Scott;<br /><br />It is tempting to blame Obama for slow growth, but not satisfying.<br /><br />Slow growth is common in other diverse counties. <br />Consider Germany, UK and Japan.<br /><br />China has growth, but doubt many Americans would desire such a system.<br />Andrewhttps://www.blogger.com/profile/01390035459036380103noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-88501600671568013792016-07-06T08:52:02.131-07:002016-07-06T08:52:02.131-07:00put all your money immediately in stocks. grannis...put all your money immediately in stocks. grannis said its ok. we demand more QEmarcusbalbushttps://www.blogger.com/profile/13596266889368486043noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-21106969894935220502016-07-06T08:23:49.531-07:002016-07-06T08:23:49.531-07:00The 10-yr Treasury yield has been lower than the r...The 10-yr Treasury yield has been lower than the rate of inflation quite a few times in the past 55 years: first in the mid-70s, then in the late 70s and early 80s. Those episodes were dominated by high and rising inflation and relatively high yields. Real yields were also negative in 2008 and 2011, when inflation moved higher on the back of rising oil prices but yields were generally low and Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-35657613178519367122016-07-06T08:09:05.289-07:002016-07-06T08:09:05.289-07:00I would just point out that the real interest rate...I would just point out that the real interest rate on the 10-year Treasury is even more compelling than your chart indicates... That is, with an official inflation rate of 1.3-2.0% per year (depending on your metric), the real yield is about zero or slightly negative. This has never happened, until now, in the history of American commerce. (Or has it? I think that last statement is correct; Grechsterhttps://www.blogger.com/profile/08898953158865778397noreply@blogger.com