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As a holder of long-term government debt, I have three different questions in mind.
Click to enlarge.
1. When can we expect to break free from the long-term trend channel?
2. When can we expect ZIRP to permanently end?
3. Of all the things I could worry about in this economy, where should the risk of rising interest rates (and expense) rank on my list?
My answers of "not soon", "not soon", and "low" may differ from yours of course. I'll be much more worried when the majority agrees with my answers. And when do I expect that to happen? Not soon.
This is not investment advice.
Source Data:
Treasury Direct: Interest Expense on the Debt Outstanding
St. Louis Fed: CPI
St. Louis Fed: Population
12 comments:
Sure, no worries. If rates start to rise, it's nothing that another 30 million immigrants, legal or otherwise, from countries with per capita GDPs less than or equal to Mexico's can't fix.
AllanF,
My worry cup overfloweth. It's just a question of ranking them.
At age 49, this one ranks low on my list. If I was 19 instead (and therefore might expect to live 60+ more years), then I would rank it higher.
In any event, I am in the very small minority which believes real yields are not going to be heading higher over the long term because the economy will continue to improve over the long term. Even if ZIRP does miraculously end, I very much doubt it will end permanently. Time will tell.
I'm not sure if I'm more worried about getting hit by falling Skylab debris or the Bond Vigilantes.
Caution, horrifying images and videos not suitable for all investment audiences:
http://www.youtube.com/results?search_query=bond+vigilantes&page=1
mab,
I'm not sure if I'm more worried about getting hit by falling Skylab debris or the Bond Vigilantes.
I'm more worried about being hit by illusionary Mir junk "bolts." There's potentially no limit on that fake supply!
Bits of Mir Hard to Find, Worth Little
Fake Mir space junk is only one among a collection of several Mir-related items already for sale on the auction site. But so far there have been no reports of people finding real pieces of the fallen space station. Since the station was guided to fall over a large swath of the Pacific Ocean rather than on land, some feel the chances of people finding actual pieces of the station are slim to none.
Mir Altitude Chart
It looks like US manufacturing employment, but that's probably just intended to confuse the bond vigilantes. Once we return to the late 1970s peak, interest rates will no doubt soar in response!
It's fitting that we treat our financial "innovators" more leniently than our space debris collectors. Very fitting. Sound eCONomic and social policy:
http://www.cbsnews.com/news/space-shuttle-debris-indictments/
http://www.fas.org/spp/civil/crs/RS21417.pdf
mab,
Now I realize why you are so worried about being hit by the debris!
What will happen if some of it gets lodged in the skull? Can't go to the hospital. That would be just like getting shot at a bank robbery.
Hospitals no doubt have to immediately report your criminal activities to the authorities!
It's a Catch 23Link text
Speaking of catch 22, here is the Fed's new and improved real estate confidence building tool!
22-foot Walleye catches plenty of attention
MacIntyre decided it was too good to go to waste and was then retrofitted to become a fully functional ice fishing hut with room for two people. Some features include salad bowls for eyes and home plumbing pipes that are used as skis to help move it around.
Prosperity, baby! That's what I'm talking about! ;)
Since the station was guided to fall over a large swath of the Pacific Ocean rather than on land, some feel the chances of people finding actual pieces of the station are slim to none.
Since the financial crisis fallout was guided to fall over a large swath of the lower 80% of the U.S population rather than on the 5%, some feel the chances of finding actual prosperity in the future are slim to none.
Fritz_O,
Something good comes out of every crisis. - Dave Pelzer
That's exactly what the dinosaurs must have been thinking as the asteroid was arriving.
"Oh, look. Something good is headed our way!" ;)
Swinging back and re-reading, I realize that sounds more shrill than snark. I was intending the latter. :)
Perhaps it's my tell. Latinization of the US (economically, not the racial composition) is my biggest worry.
AllanF,
Yeah, I similarly cringed recently when I saw that 40%+ of the births in the US were to unwed mothers.
No judgement on that. I'm not married. It just doesn't strike me as a first world country's preferred method of generating future prosperity. That's all.
How we grow our population is important, especially with so many Americans on food stamps. Sigh.
Let's just say that the "population is growing so real house prices and real stock prices can only go up" theory is not one that I'm taking as a given.
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