“Folks didn’t want to buy stocks during the ‘30’s, so corps were forced to pay a dividend yield upwards of ten percent!”
A full one third of the American money supply had simply vanished from 1930-33. The scarcity of money was likely the driver behind the high rates. Dividend yields appear to have spiked three times during the 30s:
http://www.ritholtz.com/blog/wp-content/uploads/2012/09/equity-vs-bond.png
“fwiw, what I got was that “money made tomorrow will be worth less than money today” refers to the fact that during deflation we know that less money is going to be made tomorrow off of today’s bigger investment. “
That could be. He doesn’t get points for clarity.
There would be a lower nominal yield in the future but due to deflation the real yield is actually greater than the interest rate. You add the deflation rate to the interest rate, the opposite of how we had to subtract the inflation rate from the nominal interest rate to get the real yield.
great link —thanks! [saving to desktop]