Zero interest rates have forced seniors back into the stock market.
My 80 year old neighbors making 1% on C.D.’s went back into the market, their small savings hammered with sell-off of the last 8 months. They got devastated.
I don’t see higher rates in the future with 70 million boomers retiring selling off equities; I see an all-out effort to keep small investors in the market.
ZIRP has allowed politicians to continue record deficit spending, Will that change?
This political-financial system is sickening.
kokoda
March 8, 2016 7:47 am
The New Normal:
Interest Rates always below 1% or even negative
Budget deficits from now to collapse
The BLM will continue to seize land from law-abiding citizens
The FBI will continue to kill law-abiding citizens
Blacks will continue to believe the Dem Party will help them
ISIS will cut off heads in America and the liberals will defend the murderer
etc.
Pirate Jo
March 8, 2016 8:08 am
This article shows why interest rates will not rise.
Robert Gore
March 8, 2016 8:48 am
You’ll know the shit is hitting the fan when interest rates on supposedly “safe” sovereign debt start to rise in earnest, reflecting long overdue recognition that governments are bankrupt. The only buyers will be central banks.
Thaisleeze
March 8, 2016 8:55 am
The CBO numbers also look conservative.
starfcker
March 8, 2016 9:22 am
Interest rates on existing federal debt don’t have to float. Interest rates can be fixed. Fixed rates used to be the norm. Freezing rates means this entire ‘be scared, be very scared’ line of thinking evaporates.
The government can’t “fix” rates. They issue bonds. Your mad maff skills at work again. The fact is that the government has chosen to replace a yuuge amount of 30 year bonds with short term bonds. Locking in the national debt at low long term rates would have been a smart thing to do. They did not. The average maturity on the $19 TRILLION of debt is less than 7 years. Therefore, the majority of our debt is paying between .25% and 1.7%. Any spike in inflation for any reason, would immediately result in a yuuge increase in interest expense. Secondly, if you want to now “fix” rates at a longer maturity, the 30 year is 2.7%. That would result in a yuuge increase in interest.
Please don’t post vacuous nonsense when you don’t know what the fuck you are talking about.
KaD
March 8, 2016 9:35 am
What could be considered “productive spending”?
starfcker
March 8, 2016 10:39 am
Of course they can fix rates. Government can do lots of things to the financial sector they haven’t done in a while. You may not consider it adventageous, but it damn sure can be done.
DRUD
March 8, 2016 10:47 am
Come on, Admin…this is NOT a problem. All we gotta do is apply some NIRP, some MUBSAP (Made-UP Bullshit Accounting Practices) and some non-ABM (non-Arithmetic Based Mathematics) and we can turn this $19 Trillion dollar debt into a massive asset. The rest of the world (we will simply ignore that everyone else is also massively in debt, of course) will happily pay off USA!USA!USA!’s debt and feel honored at the privilege.
You are a nothing but a fear-monger.
Administrator
Author
March 8, 2016 11:07 am
starfcker
Your ignorance of how the world works is breathtaking to behold.
starfcker
March 8, 2016 11:26 am
Maybe. But jessie has that great quote about no recovery until the financial sector gets it’s due. And i think he’s right. That day may be coming. Who’s the dog and who’s the wagging tail? We’ll see
Jessie’s quote refers to regulating Wall Street aka Glass Steagall and enforcement of existing laws.
Olga
March 8, 2016 11:31 am
And it’s interest paid to whom …. ?
I suppose we could owe it to ourselves but then how would the wealth stripping & harvesting take place?
Anonymous
March 8, 2016 11:32 am
The problem is easily solved.
The Treasury issues interest free United States Notes in place of the Federal Reserve Bank issuing debt laden Federal Reserve Notes and pays off the debts with them (or even just pays of the interest on the debt with them).
Kennedy was in the process of doing that when he left office, a shame his successors didn’t continue the practice.
artbyjoe
March 8, 2016 11:58 am
what he said at 11:32.
also, the government can take back from the fed the ability to set interest rates—-ala 1943 to 1951.
starfcker
March 8, 2016 12:00 pm
I’m not arguing jim, i’m in your field here, so I defer. But who makes the rules, our elected government, or the banks? Government has been way too passive for a long time.
BUCKHED
March 8, 2016 12:16 pm
Screw re-instating Glass-Stegall….I think we should re-instate Judge Roy Bean for them….The Hanging Judge !
overthecliff
March 8, 2016 4:00 pm
The only way to pay off the debt is to inflate it away. That has its own set of problems. We have painted ourselves into a corner and it is going to make a mess when we come out. Historically governments have tried to inflate away debt I think we are Weimar waiting to happen.
Only things with intrinsic value will be worth anything.
Muck About
March 8, 2016 8:14 pm
Hi PJ, good to see a post from you..
I think your wrong, then right. As long as the world economy is functioning at all, eventually, interest rates will rise. That will be the hangman that causes interest rates to simply collapse back to zero because there will be no one to buy them at any price. Read about the Weimar..
Zero interest rates have forced seniors back into the stock market.
My 80 year old neighbors making 1% on C.D.’s went back into the market, their small savings hammered with sell-off of the last 8 months. They got devastated.
I don’t see higher rates in the future with 70 million boomers retiring selling off equities; I see an all-out effort to keep small investors in the market.
ZIRP has allowed politicians to continue record deficit spending, Will that change?
This political-financial system is sickening.
The New Normal:
Interest Rates always below 1% or even negative
Budget deficits from now to collapse
The BLM will continue to seize land from law-abiding citizens
The FBI will continue to kill law-abiding citizens
Blacks will continue to believe the Dem Party will help them
ISIS will cut off heads in America and the liberals will defend the murderer
etc.
This article shows why interest rates will not rise.
You’ll know the shit is hitting the fan when interest rates on supposedly “safe” sovereign debt start to rise in earnest, reflecting long overdue recognition that governments are bankrupt. The only buyers will be central banks.
The CBO numbers also look conservative.
Interest rates on existing federal debt don’t have to float. Interest rates can be fixed. Fixed rates used to be the norm. Freezing rates means this entire ‘be scared, be very scared’ line of thinking evaporates.
starfcker
The government can’t “fix” rates. They issue bonds. Your mad maff skills at work again. The fact is that the government has chosen to replace a yuuge amount of 30 year bonds with short term bonds. Locking in the national debt at low long term rates would have been a smart thing to do. They did not. The average maturity on the $19 TRILLION of debt is less than 7 years. Therefore, the majority of our debt is paying between .25% and 1.7%. Any spike in inflation for any reason, would immediately result in a yuuge increase in interest expense. Secondly, if you want to now “fix” rates at a longer maturity, the 30 year is 2.7%. That would result in a yuuge increase in interest.
Please don’t post vacuous nonsense when you don’t know what the fuck you are talking about.
What could be considered “productive spending”?
Of course they can fix rates. Government can do lots of things to the financial sector they haven’t done in a while. You may not consider it adventageous, but it damn sure can be done.
Come on, Admin…this is NOT a problem. All we gotta do is apply some NIRP, some MUBSAP (Made-UP Bullshit Accounting Practices) and some non-ABM (non-Arithmetic Based Mathematics) and we can turn this $19 Trillion dollar debt into a massive asset. The rest of the world (we will simply ignore that everyone else is also massively in debt, of course) will happily pay off USA!USA!USA!’s debt and feel honored at the privilege.
You are a nothing but a fear-monger.
starfcker
Your ignorance of how the world works is breathtaking to behold.
Maybe. But jessie has that great quote about no recovery until the financial sector gets it’s due. And i think he’s right. That day may be coming. Who’s the dog and who’s the wagging tail? We’ll see
Jessie’s quote refers to regulating Wall Street aka Glass Steagall and enforcement of existing laws.
And it’s interest paid to whom …. ?
I suppose we could owe it to ourselves but then how would the wealth stripping & harvesting take place?
The problem is easily solved.
The Treasury issues interest free United States Notes in place of the Federal Reserve Bank issuing debt laden Federal Reserve Notes and pays off the debts with them (or even just pays of the interest on the debt with them).
Kennedy was in the process of doing that when he left office, a shame his successors didn’t continue the practice.
what he said at 11:32.
also, the government can take back from the fed the ability to set interest rates—-ala 1943 to 1951.
I’m not arguing jim, i’m in your field here, so I defer. But who makes the rules, our elected government, or the banks? Government has been way too passive for a long time.
Screw re-instating Glass-Stegall….I think we should re-instate Judge Roy Bean for them….The Hanging Judge !
The only way to pay off the debt is to inflate it away. That has its own set of problems. We have painted ourselves into a corner and it is going to make a mess when we come out. Historically governments have tried to inflate away debt I think we are Weimar waiting to happen.
Only things with intrinsic value will be worth anything.
Hi PJ, good to see a post from you..
I think your wrong, then right. As long as the world economy is functioning at all, eventually, interest rates will rise. That will be the hangman that causes interest rates to simply collapse back to zero because there will be no one to buy them at any price. Read about the Weimar..
MA