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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: pater tenebrarum who wrote (63573)1/31/2001 2:47:29 PM
From: Mark Adams  Read Replies (1) of 436258
 
From what I read of liquidity traps, if rates go too low, people won't buy bonds as they will anticipate future higher rates resulting in capital loss. There is a point were the cost of holding cash (gold?) drops close enough to zero that people will prefer that.

If this is correct, then there is an imaginary floor under interest rates.
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