Bond data back to the Black Death shows lower and even negative rates could be here to stay

Discussion of the Bond portion of the Permanent Portfolio

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Ad Orientem
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Bond data back to the Black Death shows lower and even negative rates could be here to stay

Post by Ad Orientem » Tue Jan 14, 2020 2:10 pm

Key Points

Data going back to the Black Plague of the 14th century shows low rates have been the norm for ages.
A paper from the Bank of England disputes prominent economic theories such as “secular stagnation” that assert the low-rate low-growth environment is new.
The paper comes as some $11 trillion in global sovereign debt continues to carry negative yields, down from a high of some $17 trillion.

https://www.cnbc.com/2020/01/14/interes ... -stay.html


To which I respond...

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Not a word acknowledging that until the First World War, pretty much the entire civilized world used gold and or silver for money. For the benefit of the authors of this paper... we don't anymore. The basic underlying rules of the game have changed. Conclusions based on data predating that change are dubious... at best.
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Kbg
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Re: Bond data back to the Black Death shows lower and even negative rates could be here to stay

Post by Kbg » Wed Jan 15, 2020 10:44 pm

Yep...things are not matching theory at all. We probably won't be around to see it but I'd wager a significant sum of $$$ that there is a Nobel Prize in Economics to whomever figures out and describes what is going on and to do so will require a very original thinker.
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