First savers are taxed at 100% by the banks. Now the Federal Government is further stepping on your head by charging you for the right to lend them money. That is incredible. They are so f*cking you in the ear. Financial literacy in the US must be at an all-time low.
From the article In Bond Frenzy, Investors Bet on Inflation in the New York Times:
“At a time when savers complain that they are earning almost no interest from their bank accounts, some investors on Monday bought United States government bonds that effectively had a negative rate of return. Bizarre as it sounds, that is correct. In an auction of a special kind of five-year Treasury bond, investors paid $105.50 for every $100 of bonds the government sold — agreeing to pay the government for the privilege of lending it money.”
Economically speaking, saving is not investing. Saving is the act of “not consuming.”
You can always capture inflation in commodities. It’s a lot cleaner, and it’s not corrupt.
One bubble to the next. The real question I’d have for Victor is when long bonds are finally going to go into secular bear market and what signs there will be other than just price action.
I still remember the JGB trade in late 90’s amongst macro traders, otherwise known as the grave yard trade. It just turned into a zombie and wore them all out.
Brilliant and absolutely correct. My learning (having been a banker myself earlier) is not to ever ever subsidize a bank ever gain. Starve of them my cash. Use it myself instead of subsidizing others. Banks will screw you through fees and charges in any case …to squeeze you. Bypass the bank and invest in the corporates directly if you can. Bankers always made money on your money and holidayed in the Riviera for no special genius- this was always ‘legal theft’. Savers ALWAYS underwrite. They are the “Riviera” holiday sponsors.This is no surprise. They ARE the game- the bank’s game. People need to turn this game around.