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A couple of months ago I said bond yields would be coming down. It's MMT 101. Trade and invest using the concepts of MMT. Get a 30-day free trial to MMT Trader. https://www.pitbulleconomics.com/ Download my podcasts! New one every week. https://www.buzzsprout.com/1105286 Mike Norman Twitter https://twitter.com/mikenorman Mike Norman Economics: https://mikenormaneconomics.blogspot.com/
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A couple of months ago I said bond yields would be coming down. It's MMT 101. Trade and invest using the concepts of MMT. Get a 30-day free trial to MMT Trader. https://www.pitbulleconomics.com/ Download my podcasts! New one every week. https://www.buzzsprout.com/1105286 Mike Norman Twitter https://twitter.com/mikenorman Mike Norman Economics: https://mikenormaneconomics.blogspot.com/
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Robert Vienneau writes Alienation And Commodity Fetishism
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| A couple of months ago I said bond yields would be coming down. It's MMT 101. Trade and invest using the concepts of MMT. Get a 30-day free trial to MMT Trader. https://www.pitbulleconomics.com/ Download my podcasts! New one every week. https://www.buzzsprout.com/1105286 Mike Norman Twitter https://twitter.com/mikenorman Mike Norman Economics: https://mikenormaneconomics.blogspot.com/ |
Mike, please share reading and books to help us be as knowledgeable as you.
Hey look my hair's going grey.
"Going back to work, maybe not by choice" Thats usually how it happens Mike.
Is there anyone out there like mike I could follow to gain for insight on how economy work?
Not for trading but Warren Mosler, Stephanie Kelton, Bill Mitchell (Aus), Cowboy Economist from Texas Christian U (he also writes on Forbes), Randall Wray (look up "what is money" classroom lecture on YouTube, has another name but that should find it).
So the "natural" rate of interest (on govt bonds) is zero. Why? Bank loans create credit, with keystrokes (offset by legal loan agreements, so that's a paper swap). That creates deposits which adds numbers to banks' "reserves" accounts (their checking) at the Fed, which they use for overnight clearing and lend overnight to other Banks. Banks create reserves when they create credit.
Govt spending goes thru the Fed to banks, so that also adds numbers to reserve accounts.
If that money balance piles up, what's the interest rate for banks to lend overnight to other banks when there's surplus dollars in the accounts of banks and zero demand for overnight lending of reserves? ZERO PERCENT, obviously.
If the Fed wants rates above zero percent, they need to "artificially" intervene to remove excess reserves. They sell Treasury Bonds or other assets to the banks in order to reduce reserve balances.
@dilbertgeg thank you
@dilbertgeg not traders.
@dilbertgeg thats a naive economist example. Yes..this could be true but in practice interest rates are not zero because the modern day financial system requires risk securities. The entire insurance industry needs government stock to run actuary portfolios to manage their life risk and general insurance exposures. Imagine how expensive your car insurance would be with zero yields on government stock. My beef over the last 30 years of industry experience is that we hear very narrow viewpoints which dont consider other any other needs of market participants due lack of broader experience in this industry.
When you don't have to compete against the gov the wages will go down. Better to look now then when the $300 ends in blue states
thank you for your insight on how a debt celling impasse would affect the bond yields
Mike Norman & Oscar Carboni G.O.A.T. legends they truly understand what's happening ?
great call Mike
MMT works until it doesn't… the Magic Money Tree magically controls all until it doesnt…
that's not how principles work. they should work always
MMT is a description of monetary operations of a government, there is no magic, just balance sheet operations.
In your previous video, you said you like bank stocks, all of the major bank stocks, and you plan to hold them. When bond yields continue to fall, bank stocks will go down too. Why do you want to hold bank stocks then?
Great work as always! Mike is always around or over the target. I hope everyone is paying attention. A lot being said here. Hoorah!
dude that is a funny voice when you mimic the Peter Schiff types….
It appears that some of the advocates of MMT (Bill Mitchell, Stepanie Kelton) have a lot of Socialist ideas and policies that they'd like to see implemented. Some have called Mitchell a Marxist. I'm attracted to MMT because it claims to clarify how our existing financial systems actually work, yet, I'm a bit wary of the fact that there is a strong Socialist push in MMT. Personally I don't think UBI, gov job guarantees, etc. are good ideas. They go against human behaviour. To me, Capitalism resonates better with human behavior than Socialism does (as has been proven in history many times).
What is the natural rate of inflation?
As Bond yields come down Bond investors will move money into Stocks YesNo.
Lol Mike always gets me to laugh with the “they’re printing money.” Dammit man that’s funny.