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Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

bankofengland.co.uk

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Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#11

Post by sudosysgen »

bananaboi wrote: post #8
voodootrucker wrote: post #5

It took me a while to get it, but this all works in the opposite direction as well. The time value of money can be negative: A dollar today can be worth more than a dollar tomorrow. It's not pretty. When the pie is shrinking the incentives get ugly rapidly. Let's hope this can be a "good" deleveraging, we fix metrics that don't positively correlate with non-zero-sum productivity growth, and on top of that pull the ne…

I think you meant to say "A dollar tomorrow can be worth more than a dollar today".

That would be positive time value.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#12

Post by hardlianotion »

AndrewBissell wrote: post #4
panax wrote: post #2

"since the major monetary upheavals of the late middle ages, a trend decline between 0.6–1.6 basis points per annum has prevailed" " Against their long‑term context, currently depressed sovereign real rates are in fact converging ‘back to historical trend’ — a trend that makes narratives about a ‘secular stagnation’ environment entirely misleading, and suggests that — irrespective of particular monetary and fiscal re…

Extrapolating a trend (even a 700 year long one) into the indefinite future is a fraught exercise, as is attempting to read it as benign just because it has perhaps been so in the past. Remind me, who was it that wrote about the tendency of the rate of the profit to fall over the long term, until the point it provokes a crisis?

Yes, you’d greatly prefer to understand why.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#13

Post by kristopolous »

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries.

As far as a stable society goes, low interest rates are a good sign

Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and failure, yes, but the banks are still open, the lights are still on, the trash is still going out, your mail is still arriving... Things are more or less still operational

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#14

Post by xwdv »

kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

A plane crashed in Indonesia.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#15

Post by phkahler »

kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

the US budget deficit is rising, soon out of control IMHO. Raising rates is no longer viable without severe consequences.

Nobody has seemed to realize that it's the rate of change in interest rates that has an effect, not the absolute level of them (within reason).

The stock market is one giant bubble.

People talk occasionally about negative interest rates, and wonder how A) that might work and B) how not to have people realize what a house of cards it all is.

But sure, rates are low and everything is great!

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#16

Post by pochamago »

kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

Ethiopia effectively started a civil war, but I don't think it's source is the pandemic.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#17

Post by anewaccount2021 »

kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

Interest rates are the cost to borrow money. Money isn't scarce, so its worth less, and as a result, costs less to borrow.

Devalued currencies tend not to be consistent with historical stability - they tend to arrive around the same time a society "resets".

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#18

Post by koolba »

kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

> ... currencies haven't been debased ...

We’ve printed trillions of dollars and Congress is en route to print trillions more. The price for that has yet to be paid.

Re: Global real interest rates and the ‘suprasecular’ decline, 1311–2018 (2020)

#19

Post by warlog »

pochamago wrote: post #16
kristopolous wrote: post #13

This isn't surprising. Risk and rates are related and there's been an increase in stability and decrease in risk throughout the centuries. As far as a stable society goes, low interest rates are a good sign Even amidst this terrible pandemic, no country has collapsed, nobody has gone to war, currencies haven't been debased, all protests have more or less been handled, nothing is truly out of control. Mass death and f…

Ethiopia effectively started a civil war, but I don't think it's source is the pandemic.

Water!
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