SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Mish's Global Economic Trend Analysis
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: mishedlo who wrote (107386)1/28/2010 12:03:58 PM
From: Hawkmoon  Read Replies (1) of 116555
 
Mish.. What happens when bond "bubbles" pop?

Where does the money go?

Gold?? Possibly.. Stocks/Equities?.. Generally.. Real Estate?? Possible..

But if we're facing more deflation, which seems to be what both of us agree is the overall current trend for the foreseeable future, then one would think we'd see even more upward pressure in the debt markets.

After all, look at where our treasury rates currently are, even WITH the huge "stimulus package" from Mr. Obama.. Historic lows...

If the market perceives that he's not going to issue more treasury supply, then there will be even more demand for the supply that exists.

This seems to me to be the ultimate quandary. We look at bond yields and immediately opine they are overbought and there is no value there. But corporate bond purchases was where money went when they couldn't find value in Treasuries.

Thus, I agree with you.. bonds are tremendously overbought. Savings and CD rates might as well be zero. There's so much money looking for safety out there that our rates are at historic lows.

There are just TOO FEW qualified borrowers out there. And most are paying down their debt, while others are finding themselves unemployed and not even able to pay their mortgages, just waiting for the foreclosure papers to be served.

Jobs.. Mish.. Jobs.. If our people are not working, preferably in productive activity (even if temporarily paid by taxpayers), there will be continued deflation.

Hawk
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News