Negative Yielding Debt

[ajl]

Errol I will give you a little tip. The fed and CBs will be neutered under Trump and the US will return to a partial gold standard within about 5 yrs. Real assets will rise in accordance. I would personally be out of notes and stocks when that happens. The US will still rise to the top of the new economic system and leave the rest in the dust.

If this does happen and it is highly unlikely, a partial return to monetary soundness will collapse both stocks bonds, and real estate. That would not be good for the president's re election chances. I am kind of surprised there has not been a cut in short term interest rates in the US already given that longer dated treasuries have fallen so much since last October.

[biglentil]

Sven Henrich:
Central banks 2009-2018:
“We will print $20 trillion & cut rates to nothing & that will reach our inflation goals.”

Central banks 2019:
“Ok, none of that worked so let’s print more & cut rates again. Trust us we know what we’re doing.”

[chuckChuck]

Worst debt to GDP countries (believe this current order).

1. Japan
2. Greece
3. Sudan
4. Venezuela
5. Lebanon
6. Portugal
7. Italy
8. U.S.A.

farmaholic . . . does debt matter and need to be serviced? . . . yes. We will all have a reality check and find out why (IMO). It will severely cost the next generation . . . our kids and their kids.

The USA is right in there with Venezuela, Greece, Portugal and Italy? And Trump cuts taxes and increases spending and their debt?

Is this is a new kind of fiscal conservatism? LOL. And he loves protectionism.

And numerous Agriville posters are in love with Trump and America and consider it a model for good governance?

Trump is the greatest and America is indeed great again!

He can do no wrong in the eyes of some.

[macdon02]

I think just about everyone understands that too much debt is a bad thing. But what actually happens when govt defaults on a broad scale basis and the process up to that point? Are taxes gonna increase to stifling levels? Does the purchasing capacity of your currency diminish to the point you wheel barrows of it to buy a loaf of bread? Will promises of being taken of in old age by the state vanish? I don't think it's our children that'll carry the burden, it'll be us as we get beyond our ability to make a living and everything we worked for in our life span is either seized or worthless. There has to be a better way then the current path. The problem is there's zero original thought put into governance and who in their right mind would step into the current mess if they had the capacity to actually fix it? Bernanke got us into this because we couldn't handle a crash and the too big to fail ideology. It's a giant spring compressing and when it lets go whenever and wherever there's gonna be a ton of disappointment likely resulting in revolution and reset. Negative rates were supposed to spawn growth as punishment for sitting on cash and instead it created an increase in equities, not increased day to day spending. Why equities? Because you can cross borders with it when scared, it's mobile. Errol made note it's a parking lot, where is it coming from and why? It isn't domestic USA pumping it, it's the ROW. You can see it in bitcoin as the Chinese want out, it's British and European and even Canadian as the home currency bleeds to the reserve status of USD by default. Trump is merely in the right place at the right time as far as growth in equities goes. Anything priced in USD is increasing in value, breaking out of long term resistance or seeing new highs. The same can't be said for the rest of the world. I think the dollar is going parabolic in the next 5 years or less and it'll rip your face off being on the wrong side. 103 is the line.

[errolanderson]

U.S. 10-year treasury yields appear headed to 0 percent.

Markets are caught in a deflationary debt trap (IMO). And central bankers are now just realizing that inflation cannot be generated through Keynesian policy. Deflation is the risk that central banks cannot control. It is coming in fast and central bankers appear panicked and now cutting rates in-unison.

How this cannot impact stock markets soon is beyond my comprehension.

[AlbertaFarmer5]

U.S. 10-year treasury yields appear headed to 0 percent.

Markets are caught in a deflationary debt trap (IMO). And central bankers are now just realizing that inflation cannot be generated through Keynesian policy. Deflation is the risk that central banks cannot control. It is coming in fast and central bankers appear panicked and now cutting rates in-unison.

How this cannot impact stock markets soon is beyond my comprehension.

It already is affecting stock markets. That is most of the reason they are so high. And likely will continue to defy gravity and pundits best wishes.

[Ache4Acres]

There is zero chance of deflationary anything. Inflation is truly rampant and will only accelerate as the rates drop and the printing machines are cranked higher. Economies are doomed for the next 20 years as the baby boomers are done having fun and now just sit home watching reruns of I love Lucy.

Debts will always be paid by the borrower when you control the printing press.

U.S. 10-year treasury yields appear headed to 0 percent.

Markets are caught in a deflationary debt trap (IMO). And central bankers are now just realizing that inflation cannot be generated through Keynesian policy. Deflation is the risk that central banks cannot control. It is coming in fast and central bankers appear panicked and now cutting rates in-unison.

How this cannot impact stock markets soon is beyond my comprehension.

[biglentil]

There is zero chance of deflationary anything. Inflation is truly rampant and will only accelerate as the rates drop and the printing machines are cranked higher. Economies are doomed for the next 20 years as the baby boomers are done having fun and now just sit home watching reruns of I love Lucy.

Debts will always be paid by the borrower when you control the printing press.

Debts will ultimately be paid by the savers and pensioners that see their purchasing power constantly eroded by inflation

[farmaholic]

Debts will ultimately be paid by the savers and pensioners that see their purchasing power constantly eroded by inflation

I think we are already going down that path. I thought I would be further along than I am by now in my retirement savings....not that I haven't and won't continue to put anything away....just crappy growth in my opinion.

I wonder if there was ever a poorer time in history to be a saver. I suppose there was but maybe only attributed to war. This has been an economic cluster**** as far as I'm concerned. Economic policy....

[jazz]

Surprised by the lack of economic knowledge here. The USA is nowhere near the likes of Greece and Japan. The US has hundreds of trillions of dollars of real assets to back a currency. The US govt alone has a $100T in assets. They could pay the debt off tomorrow if they wanted.

What we are moving toward is resource asset backed currency and we know who the winners will be in that new world.