Tuesday, July 9, 2019

Learn Economics Topic Twenty

20. Bond Demand:

Everyone Said Bond Yields Would Go Up After QE Ended

Everyone jumped on the bandwagon of higher interest rates, after QE ended. Some have no understanding of new bond demand even now.

Blackrock: Cap on Yields Because of Monumental Bond Demand

So, the return to normal is dubious. Tantrums frighten some into selling the bonds, since monetary theory says rates will rise and you need to be in cash and not in bonds when rates are low.

Economists Reveal Massive Market Forces in Bonds Before and After QE

The interest rate on Treasuries is lower than it would otherwise have to be because part of the demand for Treasuries comes from their use as safe debt. Treasuries are essentially money.

Fed Weakness, Future Insatiable Bond Demand with Short Supply

Insatiable demand for long bonds will continue with implications for Fed weakness or strength down the road. Can the financial system be changed or will it roll down hill toward zero bound in the next downturn?

Keeping Interest Rates Low Is a Function of Demand, Not of Politics

While the Fed certainly created an atmosphere in which interest rates can remain low, it does not keep long rates low. Proof that the Fed does not keep bond yields down in a manipulative fashion is the affect ending QE had.

Greenspan on Yields, Slow Growth and Hyperinflation

One could say that Greenspan's efforts to undermine bond collateral by seeking higher yields is a conundrum in itself.


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While I have supported some economic policy, it turns out that racism was a strong motivator for some of those policies. I oppose racism in all forms and prove my commitment by rejecting anything other than the Westphalia or Westfalia view of sovereignty, which is mutual respect for all nations by all other nations. 

Perverse sovereignty is as bad or even worse than excesses in globalization which gives banks power over governments. Both are ultimately bad for America. This blogger supports free trade and opposes a border tax. But government should be stronger in order to rein in big banks who abuse the people with toxic loans.

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