Low rates are likely over the next two or three years because the rate of return on safe assets when adjusted for inflation, has been 200 basis points lower in recent years as compared with the 2001-2007 expansionFirst please help me out, now the Fed is using language like "safe assets" and comparing recent returns to the last 6 year period in history driven by market forces (albeit highly skewed, paper driven, derivative heavy, corrupted, recently deregulated debauchery of a market)... and stating that:
the U.S. is in a “high-liquidity-premium regime, in which investors are willing to pay premium prices for safe assets like government debt,”Well duh! The US is in a "high-liquidity-premium" game BECAUSE OF FED POLICY and the Fed's (including ECB, Japan and partly China) policies of driving and holding rates at artificially low levels, providing "ample liquidity" as they so often state, by buying all kinds of assets, hence completely distorting the "natural rate" of interest for so damn long now nobody even knows what the hell the "natural rate" is or would be if the Fed would do something as simple as start winding down their balance sheet!!!
It absolutely kills me that every few months the Fed comes up with new "buzz words" to describe what they insist are market forces at play without looking in the mirror! Now it's the "natural rate on 'safe assets'". WTF? When will they get their heads out of panic mode and start to allow the market to function?
I actually thought after reading this short excerpt of Mr. Bullard's speech I should look it up in it's entirety and see if the tabloid, nearly worthless on-line rag of a "market" website actually covered what he said accurately. Then I paused. Do I really want to beat myself in the head with more pointless circular speak from a bunch of idiots that have completely lost track of reality? No. I want try and stay on this side of sanity as long as humanly possible.
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