Search found 88 matches

by economicsjunkie
Sun Apr 24, 2016 2:30 pm
Forum: Permanent Portfolio Discussion
Topic: The challenge of an EU PP at current bond yields
Replies: 36
Views: 16835

Re: The challenge of an EU PP at current bond yields

Thanks for running the numbers, guys. Isn't a 40-year bond actually TOO volatile for the PP? Or, put another way, isn't an allocation of 25% too high when rates are this low? It seems to me that the bond quadrant in Japan and Europe currently has more volatility than the stock and gold quadrants. F...
by economicsjunkie
Fri Apr 22, 2016 1:54 am
Forum: Permanent Portfolio Discussion
Topic: The challenge of an EU PP at current bond yields
Replies: 36
Views: 16835

Re: The challenge of an EU Permanent PP at current bond yields

So, less than two months ago, the Japanese long bond was about where the German Bund is now. The yield has plunged to .292 in less than 60 days. Can one of you bondy, mathy types run some numbers on what kind of bond returns a Japanese investor would have gotten so far this year? If you don't want ...
by economicsjunkie
Wed Apr 20, 2016 5:14 pm
Forum: Permanent Portfolio Discussion
Topic: The challenge of an EU PP at current bond yields
Replies: 36
Views: 16835

Re: The challenge of an EU PP at current bond yields

The Swiss 10y bond yields -0.34% at the moment... but does that mean one expects the Swiss economy to be depressed for years to come? It's a very strong economy only suffering from a currency that is overvalued. It could just mean that there is a huge demand for Swiss net financial assets by intern...
by economicsjunkie
Wed Apr 20, 2016 5:10 pm
Forum: Permanent Portfolio Discussion
Topic: The challenge of an EU PP at current bond yields
Replies: 36
Views: 16835

Re: The challenge of an EU Permanent PP at current bond yields

You're making an a assumption that investors are going to act like 0% is some kind of hard limit for price moves. There has never been a 30yr bond that has gone negative as far as I know. So I am saying it is unlikely to happen. That doesn't mean it's impossible, nor does it matter for the purposes...
by economicsjunkie
Wed Apr 20, 2016 1:06 pm
Forum: Permanent Portfolio Discussion
Topic: The challenge of an EU PP at current bond yields
Replies: 36
Views: 16835

Re: The challenge of an EU Permanent PP at current bond yields

I believe that narrower rebalancing bands are necessary when rates are so low because it's harder for bonds to move up to 35% of a portfolio's value. But I'd be happy to have people poke holes in that idea. Pure rubbish!  See this: https://en.wikipedia.org/wiki/Bond_convexity No it's not rubbish! T...
by economicsjunkie
Sun Apr 10, 2016 1:44 pm
Forum: Gold
Topic: Gold and negative real interest rates revisited
Replies: 20
Views: 10790

Re: Gold and negative real interest rates revisited

bedraggled wrote: This thread has been dormant ten months.

So, thoughts, please, on negative rates and gold priced in US Dollars.
http://gyroscopicinvesting.com/forum/go ... deflation/
by economicsjunkie
Mon Mar 21, 2016 8:44 pm
Forum: Permanent Portfolio Discussion
Topic: New all-time high
Replies: 30
Views: 17928

Re: New all-time high

You sound really young in your podcasts. I thought you were in your twenties or early thirties. Ha, thanks! Currently in my mid forties, so if I go to the doctor, they don't try to fix anything anymore. https://www.youtube.com/watch?v=WzEhoyXpqzQ Have you called into Stef's show? For some reason I'...
by economicsjunkie
Mon Mar 21, 2016 3:20 pm
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

dualstow wrote: That's certainly true. They don't like gold. Still, the criticism seems to be that Rickards makes predictions all the time, and that they don't come true. Have they ever come true?
I'd ignore people who make claim to make price predictions.
by economicsjunkie
Tue Mar 15, 2016 4:48 pm
Forum: Bonds
Topic: Why not just keep cash instead of investing in negative rate yielding bonds?
Replies: 5
Views: 5549

Re: Why not just keep cash instead of investing in negative rate yielding bonds?

Kriegsspiel wrote: Individual Europeans could still buy some gold, if they were reaching for yield. It'd be like 1,000 times less voluminous.
Which is probably happening as well.
by economicsjunkie
Fri Mar 11, 2016 10:51 pm
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

I've seen this ascribed to the uncertainty of negative interest rates, which are now being talked about as inevitable for many countries that aren't in the negative zone yet (e.g. Japan).  That makes sense.  I'd expect even more gold-buying if banks start imposing negative interest rates on savings...
by economicsjunkie
Wed Mar 09, 2016 2:43 am
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

Haven't looked at that velocity chart in a while. Thanks for that. For all I know we'll soon have negative velocity, too!  ;D :P
by economicsjunkie
Sun Mar 06, 2016 2:16 pm
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

I don't agree. I think Mish is correct, people are moving to gold to avoid paying interest on their savings. However, if it looks like the US is going to raise rates then gold will reverse. There is nothing more complex here than a basic carry trade. I would qualify that to say that if it looks lik...
by economicsjunkie
Sun Mar 06, 2016 2:10 pm
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

What gold is responding to is inflationary central bank behavior. The central bank cannot create noticeable inflation. All they can do is boost bank reserves, but if credit demand remains low (or is expected to go lower in future) bank reserves won't do much if anything at all, besides ending up as...
by economicsjunkie
Sun Mar 06, 2016 2:04 pm
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

Re: More evidence that gold responds well to deflation

I'm sorry, but I fail to see the connection between "moving to gold to avoid paying interest on savings" and deflation. Low and especially negative interest rates are evidence or deflationary pressures. One explanation could be for example that people expect future prices to be lower than today's a...
by economicsjunkie
Fri Mar 04, 2016 11:44 am
Forum: Permanent Portfolio Discussion
Topic: ultra low / negative interest rates in Germany
Replies: 101
Views: 47924

Re: ultra low / negative interest rates in Germany

More evidence that gold responds well to deflation: http://mishtalk.com/2016/03/04/demand-of-gold-surges-blackrock-suspends-issuance-of-new-shares-for-ishares-gold-trust/ "One of the biggest factors behind gold’s rise has been negative rates. The Bank of Japan last month joined a growing number of c...
by economicsjunkie
Fri Mar 04, 2016 11:41 am
Forum: Gold
Topic: More evidence that gold responds well to deflation
Replies: 21
Views: 13489

More evidence that gold responds well to deflation

http://mishtalk.com/2016/03/04/demand-of-gold-surges-blackrock-suspends-issuance-of-new-shares-for-ishares-gold-trust/ "One of the biggest factors behind gold’s rise has been negative rates. The Bank of Japan last month joined a growing number of central banks, including the Swiss National Bank and ...
by economicsjunkie
Wed Mar 02, 2016 1:35 pm
Forum: Bonds
Topic: TLT value increased when FED raised rates?
Replies: 4
Views: 4192

Re: TLT value increased when FED raised rates?

I thought the bonds where suppose to loose value when rates increased. This is crazy! The Fed Funds rate is a short term rate. Put simply: The yield investors ask on a 30 year Treasury is essentially their expected average yield of all the 30 1 yr Treasurys inside that timespan (or all the 60 6 mon...
by economicsjunkie
Wed Mar 02, 2016 1:19 pm
Forum: Bonds
Topic: EDV?
Replies: 33
Views: 27446

Re: EDV?

ochotona wrote: But you STILL have to pay IRS every year on the imputed income! It's a pain! That's why I'll never own them in a taxable account.
I believe was the main reason that led HB to discard Zeroes categorically as an option for PP investors.
by economicsjunkie
Thu Feb 25, 2016 4:14 am
Forum: Permanent Portfolio Discussion
Topic: What is a US dollar?
Replies: 53
Views: 22326

Re: What is a US dollar?

So a US Dollar is a token denominated in units of the US Dollar? That is a circular definition, which doesn't actually define anything. That's a circular definition indeed. But I didn't propose it. The one who wrote that sentence is unfortunately you. No, I wrote the sentence with a blank in it. Yo...
by economicsjunkie
Wed Feb 24, 2016 2:45 pm
Forum: Permanent Portfolio Discussion
Topic: What is a US dollar?
Replies: 53
Views: 22326

Re: What is a US dollar?

That's what a fiat currency means. It's not backed by anything. There's no basic, fixed unit of value you can exchange it for. That's not true. Fiat money means it can be exchanged against the "service" of discharging debt imposed upon you out of nowhere by the US Treasury. As a result there's virt...
by economicsjunkie
Wed Feb 24, 2016 2:41 pm
Forum: Permanent Portfolio Discussion
Topic: What is a US dollar?
Replies: 53
Views: 22326

Re: What is a US dollar?

Libertarian666 wrote: So a US Dollar is a token denominated in units of the US Dollar?
That is a circular definition, which doesn't actually define anything.
That's a circular definition indeed. But I didn't propose it. The one who wrote that sentence is unfortunately you.
by economicsjunkie
Wed Feb 24, 2016 12:06 am
Forum: Permanent Portfolio Discussion
Topic: What is a US dollar?
Replies: 53
Views: 22326

Re: What is a US dollar?

Sure, but that still isn't a definition. For that, you would have to say "A US Dollar is a(n) _____________ that allows you to do...". What goes in the blank? Token. Ok, but a token denominated in what unit? If you buy a subway token (assuming they still have those), it is good for one ride, so the...
by economicsjunkie
Tue Feb 23, 2016 2:26 pm
Forum: Permanent Portfolio Discussion
Topic: What is a US dollar?
Replies: 53
Views: 22326

Re: What is a US dollar?

A US Dollar allows you to discharge tax liabilities imposed upon you by the US Treasury, which are always denoted in US Dollar. Sure, but that still isn't a definition. For that, you would have to say "A US Dollar is a(n) _____________ that allows you to do...". What goes in the blank? Token.