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View Full Version : Interest rate will never ever increase again



indomie
29-04-13, 11:16
http://instituteofeconomicunderstanding.org/?df3w

Dow 14740. The stock market always goes up. The greatest bull market in human history is still going strong after four years with zero signs of slowing. Every dip keeps being bought. People getting richer than ever with real estate, speculation, web 2.0/social media, and buying the dips. In nominal terms, never before has so much wealth been created than in the past four years. Oh and treasury yeilds still falling despite RECORD highs for the major indicies. The treasury market goes into 'shock mode' on the smallest of bad news, but the market brushes it off. No repeat of the bond crash of 1994 as your perspicacious economic expert predicted many months ago. There will never be bear market ever again, or at least not for many decades. Daily volume will gradually fall as stocks rise, so the amount of money churning in the market will remain mostly unchanged and volatility will converge to zero as financial instruments become better calibrated to smooth out fluctuations. If you want to be a liberal pert, go ahead and keep waiting for the shoe to drop or the blackswan that will never arrive.

I am always right.

phantom_opera
29-04-13, 11:21
wow .. bro indomie sounds like bro blackjack today, 3rd eye ah?

indomie
29-04-13, 11:28
wow .. bro indomie sounds like bro blackjack today, 3rd eye ah?
Hahaha... Sorry I forgot to take medicine this morning

radha08
29-04-13, 12:18
Hahaha... Sorry I forgot to take medicine this morning

its ok u can forget anything as long as interest rate dont go UP...:spliff:

star
29-04-13, 13:46
Maybe in future we need to pay bank in order to keep money inside.

DKSG
29-04-13, 14:18
Maybe in future we need to pay bank in order to keep money inside.

May not be too far into the future ...

Negative interest rate - now interest rate is already negative in real terms.

Interest 1.x%, Inflation 4.5%. You lose 3%.

DKSG

eng81157
29-04-13, 15:24
never say never in such absolute terms.....

indomie
29-04-13, 15:39
never say never in such absolute terms.....
Any reason why there is a chance of rate increase?

eng81157
29-04-13, 15:53
Any reason why there is a chance of rate increase?

i believe you should be asking why there will never ever be a chance of rate increasing.

a statistician worth his salt never makes an absolute claim, with an undefined timeline

danguard
29-04-13, 16:08
http://instituteofeconomicunderstanding.org/?df3w

Dow 14740. The stock market always goes up. The greatest bull market in human history is still going strong after four years with zero signs of slowing. Every dip keeps being bought. People getting richer than ever with real estate, speculation, web 2.0/social media, and buying the dips. In nominal terms, never before has so much wealth been created than in the past four years. Oh and treasury yeilds still falling despite RECORD highs for the major indicies. The treasury market goes into 'shock mode' on the smallest of bad news, but the market brushes it off. No repeat of the bond crash of 1994 as your perspicacious economic expert predicted many months ago. There will never be bear market ever again, or at least not for many decades. Daily volume will gradually fall as stocks rise, so the amount of money churning in the market will remain mostly unchanged and volatility will converge to zero as financial instruments become better calibrated to smooth out fluctuations. If you want to be a liberal pert, go ahead and keep waiting for the shoe to drop or the blackswan that will never arrive.

I am always right.

I am also buying in the dip for blue chip stocks in Singapore - best way to park marnee for dividend yield and its stable for me as well :cool:

indomie
29-04-13, 16:21
i believe you should be asking why there will never ever be a chance of rate increasing.

a statistician worth his salt never makes an absolute claim, with an undefined timeline
I believe the western world demand is collapsing and at no point in time it will ever recover. The riches to rags story doesn't usually end well. Once u are accustomed to a certain lifestyle, there is a level that u can no longer drop any further. The western nation need to drop to the level of servitude. This level they won't do. They would rather sell their future to live for today.

With a shocking statement I want to get people to reject my statement. So I could evaluate my own believe.

eng81157
29-04-13, 16:26
I believe the western world demand is collapsing and at no point in time it will ever recover. The riches to rags story doesn't usually end well. Once u are accustomed to a certain lifestyle, there is a level that u can no longer drop any further. The western nation need to drop to the level of servitude. This level they won't do. They would rather sell their future to live for today.

With a shocking statement I want to get people to reject my statement. So I could evaluate my own believe.

you do realise even with a 0.01% increase, your statement doesn't hold anymore.

can you guarantee that rates won't move up by 0.01% within 20 years? i don't even need to do scenario postulations about the economy

indomie
29-04-13, 16:42
you do realise even with a 0.01% increase, your statement doesn't hold anymore.

can you guarantee that rates won't move up by 0.01% within 20 years? i don't even need to do scenario postulations about the economy
Actually your argument just reinforced my believe. The possibility of a rate increase is so minuscule that one would rather dwell on the technicality, rather than on the substance.

eng81157
29-04-13, 16:53
Actually your argument just reinforced my believe. The possibility of a rate increase is so minuscule that one would rather dwell on the technicality, rather than on the substance.

my use of an example supports your belief??!!!! :doh: :doh:
please learn to separate fiction from facts.

if i used a figure of 1%, does it mean to say it doesn't support your statement?

it would be entirely different if you rephrase your statement - the likelihood of interest rates hike would be low in the "Time Frame"

"I will never ever eat chicken rice again" isn't quite the same as "I don't think I will eat chicken rice in the next few weeks"

iridrium
29-04-13, 17:05
my use of an example supports your belief??!!!! :doh: :doh:
please learn to separate fiction from facts.

if i used a figure of 1%, does it mean to say it doesn't support your statement?

it would be entirely different if you rephrase your statement - the likelihood of interest rates hike would be low in the "Time Frame"

"I will never ever eat chicken rice again" isn't quite the same as "I don't think I will eat chicken rice in the next few weeks"

Agree. Well said.

It is not the idea behind it, but the english.

indomie
29-04-13, 17:55
Agree. Well said.

It is not the idea behind it, but the english.
I was wrong. My apology.

indomie
29-04-13, 18:08
But just for entertainment, if you are curious please click on the link I provide on the first post. Here some of the excerpt:

4/25/2013 The Daily View: Spending Vs. Austerity, Revising Correct Predictions


Dow 14750

Rogoff and Carmen Reinhart (debt reduction) versus Krugman (more spending) who is right? Both are right and wrong to varying degrees. Krugman is right about the debt binge being sustainable due to historically low bond yields and that America isn't Greece, but wrong about spending on useless job creation programs and social safety nets. He's also wrong about high unemployment being detrimental to the economy or a national 'crisis'. The proponents of austerity are right about the need to cut welfare and taxes, but wrong about the sustainability of spending, the dollar, and the fed.

In previous posts I've given fundamental reasons why stocks always go up and why they have such a strong tendency to always rebound so quickly from sell-offs. Last week the market fell and now all the losses have been recovered and we still an entire day left of trading. Let's recap: interest rates are never going up again




His idea is intriguing even to myself. Don't shoot the messenger.

Amber Woods
29-04-13, 18:18
http://instituteofeconomicunderstanding.org/?df3w

Dow 14740. The stock market always goes up. The greatest bull market in human history is still going strong after four years with zero signs of slowing. Every dip keeps being bought. People getting richer than ever with real estate, speculation, web 2.0/social media, and buying the dips. In nominal terms, never before has so much wealth been created than in the past four years. Oh and treasury yeilds still falling despite RECORD highs for the major indicies. The treasury market goes into 'shock mode' on the smallest of bad news, but the market brushes it off. No repeat of the bond crash of 1994 as your perspicacious economic expert predicted many months ago. There will never be bear market ever again, or at least not for many decades. Daily volume will gradually fall as stocks rise, so the amount of money churning in the market will remain mostly unchanged and volatility will converge to zero as financial instruments become better calibrated to smooth out fluctuations. If you want to be a liberal pert, go ahead and keep waiting for the shoe to drop or the blackswan that will never arrive.

I am always right.

It is critical to know who is the writer (source) who say what he said. The writer sounds like someone writing his personal blog.

indomie
29-04-13, 20:43
Mr Credit – Making You Smarter than Everyone Else…
The Mr Credit Radio Show

When will interest rates start going up again…? I think I’ve figured it*out.
Everyone seems to think that interest rates *”have to eventually go higher”, but that is most definitely not the case. It takes a catalyst to move rates lower and it takes a catalyst to move rates higher. Usually, we would be talking about inflation as that catalyst, but not this time. Ben Bernanke has sold us on his loose monetary policy because of “tame inflation” figures, but what they measure, in his world of Academia, aren’t a lot of the items that effect the average consumer such as grocery costs, rent amounts, etc.

So, what are those catalysts and when are they likely to happen? First, we have to look at why rates went down. The Federal Reserve started buying Mortgage Bonds to keep mortgage rates down, which worked like a charm as mortgage rates are at all-time lows. But, it didn’t stop there. The Federal Reserve also lowered the overnight lending rate to effectively 0%. (It’s technically 0-0.25%)

There are two major results that come from any low interest rate environment.
#1 – The Stock Market goes higher. Just this week, the Dow Jones Industrial Average has hit an all-time high on essentially no economic news whatsoever. Because interest rates are so low (a 10-year CD at the bank pays about 1% APY), investors are forced to take on risk and invest in stocks in an attempt to earn a return to reach their investment goals. With a number of stocks paying 3%+ in yield and very few people having knowledge about alternatives like securitized real estate investments, investor money continues to pour into the stock market causing it to go higher as we have experienced since March of 2009 (The Stock Market has more than doubled since then).

#2 – The Government can afford to make payments on it’s debt and easily borrow more money. The 10-year treasury notes are paying right at 2% and the Government is taking in Billions of dollars a day selling these notes. The National Debt is over $16 Trillion. If that were all in T-bills at 2%, the monthly payment would be $147 Billion. The Government only brings in about $210 Billion per month. So right now, it costs the Government ~70% of it’s monthly income just to make the payments on it’s debt. If rates were to go higher, the numbers would become even less favorable.

So, we know who caused interest rates to go lower and we know why… What easier way is there to keep the public happy when the Economy stinks and Employment rates are awful than to have a Stock Market that goes up and makes record highs? What easier way is there to continue to spend money you don’t have then to be able to borrow at a cheap interest rate?

The Conclusion: Rates aren’t going back up until the Government has a balanced budget or a surplus budget and starts paying down it’s debt. Until then, they will need the low rates just to stay afloat! I don’t know if this will happen in our lifetime, but I’m very confident it won’t happen in the next 10-15 years at least. Expect a low interest rate environment and a light Stock Market for the*foreseeable*future. Nothing else makes sense for the Government, who is ultimately calling the shots. (through Ben Bernanke of course)

chestnut
29-04-13, 20:50
Check this out

http://seekingalpha.com/article/1380161-recessionary-indicators-remain-positive?source=yahoo

Iamderek
29-04-13, 21:24
http://instituteofeconomicunderstanding.org/?df3w

Dow 14740. The stock market always goes up. The greatest bull market in human history is still going strong after four years with zero signs of slowing. Every dip keeps being bought. People getting richer than ever with real estate, speculation, web 2.0/social media, and buying the dips. In nominal terms, never before has so much wealth been created than in the past four years. Oh and treasury yeilds still falling despite RECORD highs for the major indicies. The treasury market goes into 'shock mode' on the smallest of bad news, but the market brushes it off. No repeat of the bond crash of 1994 as your perspicacious economic expert predicted many months ago. There will never be bear market ever again, or at least not for many decades. Daily volume will gradually fall as stocks rise, so the amount of money churning in the market will remain mostly unchanged and volatility will converge to zero as financial instruments become better calibrated to smooth out fluctuations. If you want to be a liberal pert, go ahead and keep waiting for the shoe to drop or the blackswan that will never arrive.

I am always right.

Nice sarcasm.

Ringo33
29-04-13, 22:44
Actually USA might be force to raise interest rate if more countries starts to bypass USD for trade.

And I am expecting this will happen because the world cannot continue to print money for ever.