Skip to comments.Ex-Fed boss Greenspan says ‘there is no barrier’ to Treasury yields falling below zero
Posted on 08/14/2019 6:59:41 AM PDT by Leaning Right
There is some $15 trillion in government debt that now yields less than zero, and former Federal Reserve Chairman Alan Greenspan believes theres no reason why U.S. government bond yields couldnt join much of the developed world in the subzero world.
(Excerpt) Read more at marketwatch.com ...
Consult your advisor, there are many other ways to attain investment income in a conservative fashion.
Well the good news is that congress will probably change tax laws to not tax interest income.
The treasury rate compared to inflation is about the same today as it was then, so we savers (I’m one) are no worse off.
I use preferred stocks and pipeline MLPS that pay 4-7% dividends.
So, if savings rates go negative, will mortgage rates go negative too? Banks pay you to lend you money? credit cards pay you when you have a balance?
Not a chance. But this will screw people royally who can no longer work, busted their a$$ to save, and now get a pi$$y rate of interest and will soon get none!
There will be a mass exodus from Trump land.
> there are many other ways to attain investment income in a conservative fashion <
Right you are. Annuities, for example. But the rates on such vehicles are influenced by bond rates.
1) If it is durations other than short term rates it is the market, not the Fed.
2) If it is the market it is in response to global bond rates. There are a half dozen European nations paying negative interest rates. The Fed cant do anything about that.
3) I currently fear market risk less than interest rate risk.
To claim you are for the middle class and the proverbial working man and woman, and push for ever lower interest rates is the height of hypocrisy.
Not only seniors, but pension funds, insurance companies, even Social Security (those FICA taxes are ‘invested’ in Treasuries) depend on the cash flow of risk-free interest.
Ever lower rates starve the middle class and retiring class, and only serve to create asset bubbles.
Negative rates are insane.
> Ever lower rates starve the middle class and retiring class, and only serve to create asset bubbles. <
Very true. But when rates are low, governments can borrow more, and put off the day when they must go bankrupt. I suspect this is at least part of the motivation for keeping rates low.
“There are many other ways to attain investment income in a conservative fashion
Right you are. Annuities, for example. But the rates on such vehicles are influenced by bond rates.”
The annuity companies have to invest the money they receive from you in something. If they go bust, your annuity payments stop.
You can only safely devalue currency so much. At some point it’s better to just start taking it from people.
Same holds true for anything. Last I heard the government in many states cannot afford their db pensions. Oh, an there are ongoing rumors that your Social Security and Medicare benefits will be cut.
It would be far better to cut taxes in order to increase yields.
Nations like China have to pay us to hold our debt instruments? Tee Hee.
And thus the Dow opens down 400 points.
And thus the Dow opens down 400 points.
Dabbling is foolish.
Investing is an index fund provided by any one of several major financial houses is investing in America and over the long haul is risk free. Betting on America is a safe bet
Getting a part time job is not a waste. It keeps you sharp.
Agree. If you don't have an advisor, get one. A good advisor will have a track record of beating the S&P 500 by 2% or more.
However, you cannot expect an ROI of S&P 500 +2% with a low risk portfolio.
Your advisor should provide a retirement plan that provides a "reasonable" rate of return, with low risk and the ability to ride out a bear market.
The "reasonable" rate of return should then be used for retirement planning.
One thing that could help or at least put off the day of reckoning is to get banks to lower the interest charged on credit cards, it seems to me.
Why that is not even talked about (even by the socialist Dems) is a mystery to me.
> Investing is an index fund provided by any one of several major financial houses is investing in America and over the long haul is risk free. <
That is excellent advice for any young person! But the key phrase there is long haul. What about a senior citizen who needs monthly income?
Banks now pay next to nothing. Bond rates are not much better. I guess you could consider annuities and reverse mortgages. But those things give me the willies.
And then there are dividend-paying stocks. But then youre taking on market risk. Should a senior citizen be risking a good portion of his savings in the market? I just dont know.
P.S. Im really not asking for myself here. Just throwing out something for comment.
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