government bonds, interest rates, low interest rates, 700 year history
interest
standard Playing Financial Chicken In Your Golden Years
My generation, born during or near post World War II, has been quite fortunate. Those of us lucky to have been born in the US during this period hit a sweet spot of both place and history. The economy thrived, standards of living soared and many avoided the numerous wars that dominated the Twentieth Century. Today, the future does not [...]
standard Euro as Dodo Bird
Don’t count on the survival of the Euro. It was a Frankenstein-type creation in the first place, forced by the political elites who wanted to expand their power base. That done, the fissures and cracks began almost immediately. Now, we are on the verge of a complete break-down, one that is unavoidable no matter how much political gobbledegook is used [...]
standard The Debt Death Spiral
In the category of things to keep you up at night, consider the sovereign debt requirements in the next several years. According to Chris Puplava: Nearly 50% of the total outstanding debt of the world’s top 10 debtor nations needs to be rolled over by the end of 2015. This amount is staggering! For the top ten debtor nations it [...]
standard Jim Grant On Interest Rates
Jim Grant opines on the Libor scandal and central bank interest rate manipulations: H/T here and also another link.
standard Why Are Interest Rates So Low?
For those who think bonds are a safe place to be, you might want to reconsider. In addition to rising sovereign risk (yes, for the US as well as other countries), there is interest rate risk. Interest rate risk is what you assume when you buy a bond and do not intend to hold it to maturity. If interest rates [...]
standard Government Is Dead Man Walking
This response is from a regular reader sent directly to me. I blocked out his name only because I don’t know whether he wants it to be revealed. I am in complete agreement with what he says. It is precisely this reason that I believe the situation is hopeless. As I have said on other occasions, the situation might be [...]
standard US Equals Greece in Three Years
David Walker, former Comptroller General of the US, is quoted by David Panzner: “We are not exempt from a debt crisis,” he said. “We’re never going to default, because we can print money. At the same point in time, we have serious interest rate risk, we have serious currency risk, we have serious inflation risk over time. If it happens, [...]
standard Guaranteed Losses vs. Moving Out The Risk Curve
Chris Martenson on the Investor Problem: Debt Ceiling Dilemma: The Foul Choice Facing Investors Thursday, July 28, 2011, 10:23 am, by cmartenson For the record, I still believe that there will not be a breach of the debt ceiling and no overt default for the US. Things will be worked out in the nick of time, like they always are. [...]
standard The Debt Death Spiral
The following video outlines the debt problem. Unfortunately the interest cost is greatly understated. I believe the presenter makes his calculations based on interest rates holding constant at their current low levels while calculating future interest expense. That will not happen. Interest rates are more normally in the 5% range rather than the near zero levels today. Because most of [...]
standard The Canary Is Dying and So Is Our Future
Wikipedia describes the use of animals as early warning sensors. Canaries were used by miners: The classic example of animals serving as sentinels is the canary coal mine. Well into the 20th century, coal miners in the United Kingdom and the United States brought canaries into coal mines as an early-warning signal for toxic gases including methane and carbon monoxide. [...]
standard A Great Economist?
American Thinker provides little-known background information on Irving Fisher, considered America’s first great economist. Fisher was a monetarist, but Stephen Mauzy points out how many of his ideas are apparent in Keynesianism and a progressive agenda. Caring, Consequences, and the Commonweal By Stephen Mauzy Few terms are more sentimentalized than “I care.” When uttered by a charismatic rhetorician, audiences reflexively [...]