An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Gundlach may be right, but for other reasons. The world is awash in money owned by relatively few people, with few new investment opportunities, just speculation. High supply, low demand means lower value, as reflected in interest rates. The only thing that will change this picture is if more money gets into the hands of people who will spend it, creating demand for more goods and services. But the austerity trend is in the opposite direction, less money for productive workers who spend it, and more for hoarders and speculators. And, the new congress will continue, or enhance, the trend. Everyone is buying US bonds because we've shown we bail out creditors, not debtors. They just fail to realize that they are in effect buying paper which is diminishing in true value because it is earning less and less for them. That's the only true reason the wealthy are pushing for an increase in interest rates. It's not that they're worried about inflation. They should be worried about deflation.
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Gundlach may be right, but for other reasons. The world is awash in money owned by relatively few people, with few new investment opportunities, just speculation. High supply, low demand means lower value, as reflected in interest rates. The only thing that will change this picture is if more money gets into the hands of people who will spend it, creating demand for more goods and services. But the austerity trend is in the opposite direction, less money for productive workers who spend it, and more for hoarders and speculators. And, the new congress will continue, or enhance, the trend. Everyone is buying US bonds because we've shown we bail out creditors, not debtors. They just fail to realize that they are in effect buying paper which is diminishing in true value because it is earning less and less for them. That's the only true reason the wealthy are pushing for an increase in interest rates. It's not that they're worried about inflation. They should be worried about deflation.
Ha where has this guy been for the last 20 years....
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