/biz/ - Business & Finance

>>30220923
>how can cash ever increase in value?
Because of defaults. Most of the money in the economy is credit, or in other words debt. And everybody is leveraged to the max with debt, our whole economy depends on and revolves around credit. So when interest rates start hiking up people will need to sell their assets to get money so that they can pay their debts. When asset bubbles pop and people start selling in unison, cash becomes more desirable than depreciating assets, therefore increasing in value. This whole process of deleveraging causes debts to default, and defaults contract credit, meaning "money" just disappears because it was never there -- credit is money that will be paid back later but if you can't pay back then that credit becomes worthless.

For a better explanation, watch this video.
https://www.youtube.com/watch?v=PHe0bXAIuk0
Of course Central Banks cannot let this deleveraging happen, we're too leveraged. They will come in and this deflation will turn into inflation due to their money printing.

>>30218074
I don't know what to tell you anon, the yield tells you exactly how many dollars you get your annual yield. Bonds are essentially future dollars. You are LENDING MONEY and you are being PAID BACK.

You are arguing again for inflation. That doesn't matter when there is deflation. In a deflation there is DELEVERAGING, because people are OVER-LEVERAGED WITH DEBT. This causes DEFAULTS, and defaults cause CREDIT (or in other words "printed" "money") to DISAPPEAR, causing the money supply to DECREASE.

Do you not understand anon? If there is no YCC being implemented, we will move onto a total deleveraging! Inflation REQUIRES MORE CREDIT TO BE ISSUED

>>25437255
You'd think basic necessities would take precedence over monopoly money and boomer rocks when shit hits the fan. I'm not convinced. My silver will be worth something either during a silver bull market or after the chaos is over and things begin normalizing again, when we enter a new cycle

>>23817436
>>23817325
>What happens if the ten year yield goes above 1%? I’m scared
Not necessarily 1% but they don't need to go much higher to start causing some problems.
It's interesting. I've heard that brokers are now recommending their clients "high-return", 5% yield trash bonds when back in the good days of the economy you could just put all of your money in treasury bonds and get easily over 10% yields, risk free income! Currently the US 10-y bonds have a NEGATIVE real yield due to yields being below the annual projected 2% inflation rate (this is called return free risk). Today you HAVE to take bigger risks in the market to turn a profit because of the low treasury yields.

The U.S. 10-y Treasuries reflect the leveraging of our economy. If the yields rise enough to begin giving actual returns, players in the market start getting in trouble as loans' interest rates start climbing up -- and everybody has a lot of debt so the Central banks keep yields (and by extension interest rates) low to prevent a deleveraging event from occurring. Europeans and the Japanese for example have been issuing negative yield bonds for a while now too.

>>23159668
>They seem like the boomers that bought houses before the housing collapse
Actually my father ran a house-building business with my uncle. The business went under during the depression in the 1990's and my parents got fucked in the ass by the government when they couldn't pay their mortgages anymore. My uncle restarted real estate business later and is still at it (though he retired last year because he was just that well off, he's back at it again because not having any work was boring him), my dad became a firefighter and is now a fire chief.
Real estate has worked for my parents pretty well even though it slapped them on the wrist in the 90's. You'd think they would be more wary of the risks after what they had to go through though. They probably think that they've seen the worst of it, while I think the worst is yet to come