"Zero Has No Meaning" Says Greenspan: We Disagree, So Does Gold
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Tyler DurdenWed, 08/14/2019 - 09:14
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TwitterFacebookRedditEmailPrintAuthored by Mike Shedlock via MishTalk,Negative yields?
Who cares says Greenspan. It's meaningless.
Negative Yields "No Big Deal"No Barriers to Prevent Negative Treasury Yields.
Former Federal Reserve Chairman Alan Greenspan says he wouldn’t be surprised if U.S. bond yields turn negative. And if they do, it’s not that big of a deal.
“There is international arbitrage going on in the bond market that is helping drive long-term Treasury yields lower,” Greenspan, who led the central bank from 1987 to 2006, said in a phone interview.
“There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, beside being a certain level.”Joachim Fels, global economic adviser at Pacific Investment Management Co., detailed earlier this month a view that there’s been a change in the fundamental economic theory of time preference that helps explain why people are buying debt with negative yields. He postulated that extended life expectancy and an aging population have caused people to value future consumption more than current spending.
Greenspan, 93, said he views Fels’s thesis as very plausible and also a reason why more debt has a yield below zero. He doesn’t think it will last forever.
Flashback August 4, 2017Please consider
Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market BubbleIn a CNBC interview, the longtime central bank chief said the prolonged period of low interest rates is about to end and, with it, a bull market in fixed income that has lasted more than three decades.
“The current level of interest rates is abnormally low and there’s only one direction in which they can go, and when they start they will be rather rapid,” Greenspan said on “Squawk Box.”
Flashback July 31, 2017Alan Greenspan told
Bloomberg TV : "
By any measure, real long-term interest rates are much too low and therefore unsustainable. When they move higher they are likely to move reasonably fast. We are experiencing a bubble, not in stock prices but in bond prices. This is not discounted in the marketplace.”
Now it's "No Big Deal".
Alan Greenspan on "Irrational Exuberance"On December 5, 1996 the Maestro warned of "
Irrational Exuberance".
Click on the link for an amusing video.
More Currency Wars: Swiss Central Bank Poised to Cut Interest Rate to -1.0%As Gold Blasts Through $1500 the implied message is that central banks are out of control.
Gold has the meaning of zero correct even if central bank clowns and analysts don't.
