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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)

#101

Post by beckingz »

lettergram wrote: post #59

Don’t need interest rates when they print money. If you would like to learn more: http://anuparty.org/on-interest-slavery/ Effectively, banks can lend on margin. They put 10% down, you pay back 100% of the loan + some little interest. What does that mean? They can loan out 10x the money they have, and people pay it back in full, 10x their return. Each of those have a small bit of interest and fees. Making them a nice…

Banks don't just get free money from the government.

They have to go almost bankrupt first.

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

#102

Post by dnautics »

steveBK123 wrote: post #76
peteretep wrote: post #47

Earlier quoted context omitted.

> Mass death Covid has killed a lot of people and created a lot of heart-break, and it would be heartless to try and minimise that or to view it in purely economic times in this moment. However, I think that in 100 years, future historians will describe the effect of the deaths itself as being pretty negligable: maybe 10% over the expected rate without Covid in 2020 and 2021, maybe 5m people in each year total, again…

Also, I’m not sure exactly how you meant it, so I won’t direct this at you, just generally... I can’t get over the techbro straw man of the “lockdown” I’ve seen thrown around a lot. First, compared to most of Asia that actually got this virus under control, we have never really had much of a true lockdown here. Second, it’s not the lockdown, its the pandemic. In most areas economic activity dropped off well before an…

> we have never really had much of a true lockdown here.

And parts of europe had more of a lockdown than the US and the population fatality rate is worse. I wonder if covid just doesn't care about lockdowns; the countries that haven't gotten hit badly are 1) an island. 2) an isolated continent. 3) an island 4) a country that sits on a peninsula that has a hugely militarized impermeable border. and 5) a group of islands. Even within the US, the state that has the lowest per capita covid rate... Is an island. Even at the micro level, the city in the bay area that is one of the least affected... Is an island.

On the other hand the UK has a higher CFR and a higher per population mortality than the US, so...

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

#103

Post by op03 »

throw0101a wrote: post #63
lettergram wrote: post #61

Earlier quoted context omitted.

You sure inflation isn’t here? Houses are up massively, land, cars, stocks, crypto, etc. The inflation measurement is off. But the inflation is here.

You list assets, which have generally always gone up in value over time. Inflation, i.e. CPI, is (roughly) about cost of living through a basket of goods: * https://awealthofcommonsense.com/2021/01/inflation-truthers/ * https://news.ycombinator.com/item?id=25644580 If you don't believe the government-published CPI you can confirm their work, as others have done: * https://en.wikipedia.org/wiki/MIT_Billion_Prices_proj…

How many miles on that 2003 Golf?

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

#104

Post by freeone3000 »

dnautics wrote: post #102
steveBK123 wrote: post #76

Earlier quoted context omitted.

Also, I’m not sure exactly how you meant it, so I won’t direct this at you, just generally... I can’t get over the techbro straw man of the “lockdown” I’ve seen thrown around a lot. First, compared to most of Asia that actually got this virus under control, we have never really had much of a true lockdown here. Second, it’s not the lockdown, its the pandemic. In most areas economic activity dropped off well before an…

> we have never really had much of a true lockdown here. And parts of europe had more of a lockdown than the US and the population fatality rate is worse. I wonder if covid just doesn't care about lockdowns; the countries that haven't gotten hit badly are 1) an island. 2) an isolated continent. 3) an island 4) a country that sits on a peninsula that has a hugely militarized impermeable border. and 5) a group of islan…

It also correlates well with countries that habitually wear masks and avoid close personal contact when feeling unwell, which fits the data better as it removes the UK outlier.

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

#105

Post by dehrmann »

steveBK123 wrote: post #76
peteretep wrote: post #47

Earlier quoted context omitted.

> Mass death Covid has killed a lot of people and created a lot of heart-break, and it would be heartless to try and minimise that or to view it in purely economic times in this moment. However, I think that in 100 years, future historians will describe the effect of the deaths itself as being pretty negligable: maybe 10% over the expected rate without Covid in 2020 and 2021, maybe 5m people in each year total, again…

Also, I’m not sure exactly how you meant it, so I won’t direct this at you, just generally... I can’t get over the techbro straw man of the “lockdown” I’ve seen thrown around a lot. First, compared to most of Asia that actually got this virus under control, we have never really had much of a true lockdown here. Second, it’s not the lockdown, its the pandemic. In most areas economic activity dropped off well before an…

> compared to most of Asia that actually got this virus under control

Japan and South Korea had relatively big late December/early January waves. Not US-big, but enough that I wouldn't call it "under control."

China is controlling it, but with another round of strict lockdowns.

Taiwan is doing well. So is Singapore. I'm sure their policies are part of the reason, but I suspect the climate helps, too.

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

#106

Post by vkou »

koolba wrote: post #18
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.

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

The majority of dollars in existence do not come from the printing presses of the Fed.

The majority of dollars in existence appear from thin air on the balance sheets of fractional reserve banks, when they lend money, for business loans, personal loans, and mortgages.

During a recession, people borrow less money, and businesses tighten their belts. In order to prevent the monetary supply from shrinking (thus causing deflation[1]), the fed generally needs to start printing money.

Now, we may say that they printed too much money, or that the money did not go to the best possible places for it, but from 30,000 feet, turning on the printing presses was a sound move.

[1] Deflation is utterly horrible, and should be avoided at all costs.

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

#107

Post by vkou »

waterhouse wrote: post #32
ahepp wrote: post #21

Earlier quoted context omitted.

Yet interest rates have yet to respond (unless I have missed some major news). You are correct to point out the risk, but I don't think we can call it currency debasement yet.

Ceteris paribus, creating more money reduces its value. If, over some time period, you double the money supply, yet the monetary price of a basket of consumer goods stays the same, then that means the monetary price would have been cut in half if you hadn't printed anything. So, just because other effects are strong enough to counteract your debasing doesn't mean you're not debasing the currency.

> Ceteris paribus, creating more money reduces its value.

That is correct. What you're missing is that a large fraction of created money used to come from banks lending money. During a recession, or a pandemic, that lending tightens, which slows the rate at which money is created, and speeds the rate at which money starts getting destroyed.

It's why the fed prints money during recessions, and destroys money during economic booms.

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

#108

Post by vmception »

peteretep wrote: post #47
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…

> Mass death Covid has killed a lot of people and created a lot of heart-break, and it would be heartless to try and minimise that or to view it in purely economic times in this moment. However, I think that in 100 years, future historians will describe the effect of the deaths itself as being pretty negligable: maybe 10% over the expected rate without Covid in 2020 and 2021, maybe 5m people in each year total, again…

The upcoming COVID story is more likely to be about the other 99% who are living and simply listed as "positive case" or "recovered", and the estimated 800% more that are thought to have not been tested.

Encephalitis lethargica killed 500,000 people and overlapped with the influenza of 1918, as it preceeded and continued afterwards and disappeared as quickly as it came. Subsequently many of the Encephalitis Lethargica patients developed coma-like states in the decades to come, and stayed that way for the rest of the century until they died.

We already know COVID is a neurological disease too, which is why taste and smell get disrupted. So we'll see as time goes on.

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

#109

Post by njharman »

peteretep wrote: post #47
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…

> Mass death Covid has killed a lot of people and created a lot of heart-break, and it would be heartless to try and minimise that or to view it in purely economic times in this moment. However, I think that in 100 years, future historians will describe the effect of the deaths itself as being pretty negligable: maybe 10% over the expected rate without Covid in 2020 and 2021, maybe 5m people in each year total, again…

Ww2 death was much more spread out due to disease, famine, genocides in Asia and total war perpetrated by Stalin and Hitler. Most WWII deaths were not soldiers. Only the US and lessor UK proper concentrated in young men.

Now WW1 with Spanish flu killed high percentage of prime of age people.

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

#110

Post by vbarrielle »

gruez wrote: post #38
rland wrote: post #28

Earlier quoted context omitted.

We're going to have to, at some point, stop relying on exponential growth, and move to a sustainable (i.e. 0% rate of return) environment. For the biosphere's sake that ought to happen sooner rather than later. If we continue growing the economy at 2-3% YoY we will be extracting all energy from the Milky Way in 1000 years and applying it to the economy. Not probable! Clearly there is some transition to the upper part…

>If we continue growing the economy at 2-3% YoY we will be extracting all energy from the Milky Way in 1000 years and applying it to the economy. Not probable! gdp growth =/= energy consumption growth Also 1.03^1000 = 6.8 10^12, but wolframalpha says the number of stars in the milky way is 3 10^11. Considering that we're nowhere close to capturing even 1% of the energy output of energy that reaches the earth, let alo…

> gdp growth =/= energy consumption growth

As far as data is concerned, the correlation is pretty big though: https://theshiftproject.org/wp-content/uploads/2020/05/gdp_e...

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