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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?


To: Perspective who wrote (2243)6/9/2003 3:30:09 PM
From: NOW  Read Replies (1) | Respond to of 4905
 
Bonds at this juncture are either rising becasue the economy sucks, or some sort of hedge. If it is the latter, it will be unwound at some point. The losses there wil make the equity debacle of the past three years semm like a picnic....



To: Perspective who wrote (2243)6/9/2003 3:30:45 PM
From: KyrosL  Read Replies (1) | Respond to of 4905
 
In a moderate to high inflation situation, the Fed has to let long term rates alone or else we get hyperinflation, and join the banana republics of the past.



To: Perspective who wrote (2243)6/9/2003 10:36:19 PM
From: GraceZ  Read Replies (1) | Respond to of 4905
 
Bonds won't go down even in rising inflation if Fed starts buying them, too.

Long term bond rates are set by expectations for inflation not supply and demand. Rates are low (bond prices high) now because people have (unreasonable or perhaps reasonable)) expectations for very low future inflation. The Fed can't do a damn thing about long rates, they never could.