boz

Got Bonds

270 posts in this topic

That's complete nonsense. Some claims put the rise in prices as threefold in the course of the 16th century, however the silver flowed out of Europe for eastern goods. Just as it had during roman times.

A days unskilled labor was 3 grams of silver in 14th century England, by 1800 it was 6 to 9 grams of silver.

The Spanish wrecked themselves not because of the silver they got, but because they very quickly borrowed heavily against future silver production. In the end they lived on credit and much like today the inflation was as much a product of a credit boom. It all went bust in the 17th century.

People can never spend enough.

The actual average wage today if the entire world is taken would be $10 a day at a guess, perhaps 20 grams of silver at best.

Ferguson is either mistaken or dishonest in trying alter history to fit his theory.

Silver and gold per world capita has risen with improved technology, but so has grain production. Gold still buys the same amount of grain that it did during Roman times.

The American's very quickly learned to spend money they didn't have as well.

The exchange rate between gold and silver in Roman times was 14 to 1.

No the mistake was likely mine Wulfgar not Nialls, I read the book well over 12 months ago and the actuall figure was not crucial as we are talking about a period of 150 years v a modern one of what do you think, rather than 12 years, 18 years maybe ratheer than the 12 I suggest? Or was it 22 years, whatever it was it was very different then, during a period that was considered to have high rates of inflation due to an increase in the silver supply compared to rapmant modern day inflation.

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No the mistake was likely mine Wulfgar not Nialls, I read the book well over 12 months ago and the actuall figure was not crucial as we are talking about a period of 150 years v a modern one of what do you think, rather than 12 years, 18 years maybe ratheer than the 12 I suggest? Or was it 22 years, whatever it was it was very different then, during a period that was considered to have high rates of inflation due to an increase in the silver supply compared to rapmant modern day inflation.

It's a very tricky subject and I'm no scholar. All the above ground gold put together in late Roman times would be nothing like today.

The Annual tax revenue of the Roman Empire at it's height was equivalent to 100 tonnes of gold a year. Reputedly at one stage the Byzantine Empire had a gold hoard of 30 tons in it's treasury. Reputedly the Americans horded 22,000 tons of gold in Fort Knox at the beginning of WW2.

But the standard wage for base labor in the Roman Empire was 3 grams of silver per day, the same as Medieval England. Of course prices varied through out the Empire, being highest in Rome. Which was usually double that of the provinces.

The annual tax revenue of the Roman empire would be 4 billion USD in todays money.

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It's a very tricky subject and I'm no scholar. All the above ground gold put together in late Roman times would be nothing like today.

The Annual tax revenue of the Roman Empire at it's height was equivalent to 100 tonnes of gold a year. Reputedly at one stage the Byzantine Empire had a gold hoard of 30 tons in it's treasury. Reputedly the Americans horded 22,000 tons of gold in Fort Knox at the beginning of WW2.

But the standard wage for base labor in the Roman Empire was 3 grams of silver per day, the same as Medieval England. Of course prices varied through out the Empire, being highest in Rome. Which was usually double that of the provinces.

The annual tax revenue of the Roman empire would be 4 billion USD in todays money.

I guess the upshot is if you have a precious metal as your currency or at least backing your currency then monetary inflation will be more a result of access to new tech or new mines than it will government actions.

It is of course possible your currency would be debased like finding the red colour to mars is because it is made of 10% gold (this would be fantastic for tech investment in space travel of course) would cause gold to lose value over time i.e. you would need more gold to buy stuff than you did before. IT is really just like the gov printing more dollars but at least with precious you take that option away from the gov.

As an aside I just learnt this morning silver is used in some bandaids to fight infection!

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Greenspan Says U.S. May Soon Reach Borrowing Limit (Update1)

June 18 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.

“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said.

Greenspan rebutted “misplaced” concern that reducing the deficit would put the economic recovery in danger, entering a debate among global policy makers about how quickly to exit from stimulus measures adopted during the financial crisis. U.S. Treasury Secretary Timothy F. Geithner said this month that while fiscal tightening is needed over the “medium term,” governments must reinforce the recovery in private demand.

“The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy,” said Greenspan, 84, who served at the Fed’s helm from 1987 to 2006. “Incremental change will not be adequate.”

Rein in Debt

Pressure on capital markets would also be eased if the U.S. government “contained” the sale of Treasuries, he wrote.

“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

Yields on U.S. Treasuries have benefitted from safe-haven demand in recent months because of the European debt crisis, a circumstance that may not last, said Greenspan, who now consults for clients including Pacific Investment Management Co., which has the world’s biggest bond fund.

Benchmark 10-year Treasury notes yielded 3.20 percent as of 12:11 p.m. in Tokyo today, down from the year’s high of 4.01 percent in April and compared with as high as 5.32 percent in June 2007, before the crisis began. Yields have remained low “despite the surge in federal debt to the public during the past 18 months to $8.6 trillion from $5.5 trillion,” Greenspan said.

The swing in demand toward American government debt and away from euro-denominated bonds is “temporary,” he said.

“Our economy cannot afford a major mistake in underestimating the corrosive momentum of this fiscal crisis,” Greenspan said. “Our policy focus must therefore err significantly on the side of restraint.”

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

Last Updated: June 17, 2010 23:33 EDT

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The following Bad Santa scene captures perfectly what would be my response to Alan Greenspan:

Kid: Why do you need a car?

Willie: What the f*ck are you talking about?

Kid: This car.

Willie: Which turn is it?

Kid: Sage Terrace. Where's your sleigh?

Willie: It's in the shop, getting repaired.

Kid: Where are the reindeer?

Willie: I stabled them. Is it left or right?

Kid: That way. Where's the stable?

Willie: Next to the shop.

Kid: How do they sleep?

Willie: Who? The reindeer? Standing up.

Kid: But the noise. How do they sleep?

Willie: What noise?

Kid: From the shop.

Willie: They only work during the day, all right?

Kid: I thought it was always night at the North Pole.

Willie: Well, not now. Right now it's always day.

Kid: Then how do they sleep?

Willie: Oh, sh*t. Sage Terrace. What is it with you, anyway? Somebody drop you on your f*cking head?

Kid: On *my* head?

Willie: Well, yeah. What, are they gonna drop you on somebody else's head?

Kid: How can they drop me onto my own head?

Willie: No, not *onto* your... Would... God damn it! Are you f*cking with me?

Edited by sydney3000

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The following Bad Santa scene captures perfectly what would be my response to Alan Greenspan:

The question is Who's Bad Santa in this scenario?

<I could imagine Greenspan throwing a vodka bottle over his shoulder walking into work, though.>

oh where oh where is Hired Goon and his photoshop abilities?

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The following Bad Santa scene captures perfectly what would be my response to Alan Greenspan:

Greenspan is not that bad on this one.Even Mish kind of agree with him

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That is the lunacy. Why is Alan Greenspan suddenly making arguments that are in total contrast to everything he ever did?

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This looks interesting...

T-Minus 7 Days To A LIBOR-Induced Liquidity Crunch?

Yet for all domestic jitters, it appears that the next source of an (il)liquidity crunch will once again come from Europe. As Barclays' Joseph Abate notes, there is one event is on the horizon which could send Libor rates as high as 50% higher. And that event will occur on July 1 - the 1 year anniversary of the ECB's Long-Term Refinancing Operation.

ECB%20LTRO%206.22_0.jpg

http://www.zerohedge.com/article/t-minus-7-days-libor-induced-liquidity-crunch

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If it breaks above 5%, then we can expect for Glen to act again!

The 90 day yields have risen a bit more, but the 10 year bond yields are heading south after that false break to the upside in April. The media have been projecting further rate rises later this year. Perhaps the 10 year bond yields might surprise them?

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was surprising the monetary aggregate released yesterday. Lending is still growing and market expectation for a rise grow with it

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I was stunned by the financial aggregates. I was expecting a contraction in all credit measures.

yes, may be Shadow and others are right and home prices haven't dropped jet, those home loans number don't match well with a dropping housing market, the other option is that those numbers are lagging more then expected, after all it takes time for a buy contract to settle and to release a new loan

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I was stunned by the financial aggregates. I was expecting a contraction in all credit measures.

My guess is over the next few months the M3 will look very sick.

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My guess is over the next few months the M3 will look very sick.

You've said that before as you have said that the Euro is strong currency backed by a strong central bank. The Euro is a dead man walking.

Is M3 going to fall or not? If so why?

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You've said that before as you have said that the Euro is strong currency backed by a strong central bank. The Euro is a dead man walking.

Is M3 going to fall or not? If so why?

The M3 in euroland is at -0.2% Y/Y that is from a drop in business lending, private loans is at +0.2% y/y (data is from a couple of days ago). Inflation in euroland is nothing else then stable at 1.4% y/y, in the last 6 months was rising from 0.9% to 1.6 and now down to 1.4%. Even my mum didn't complain about price rising (she said those shopping mall and supermarket are competing for share of a shrinking market) It is dangerous to consider euro a dead man walking based on exchange rate movement. a bit like judging gold a dead man walking 10 year or so long ago...

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The 2008 low in US bond yields is being heavily tested. Looks like the bond market is not too thrilled about the recovery in the US economy.

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The 90 day yields have risen a bit more, but the 10 year bond yields are heading south after that false break to the upside in April. The media have been projecting further rate rises later this year. Perhaps the 10 year bond yields might surprise them?

No sign of a rate rise ahead.

post-148-12803969999934_thumb.jpg

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The 2008 low in US bond yields is being heavily tested. Looks like the bond market is not too thrilled about the recovery in the US economy.

You've developed a case of falling long bonds, I suggest medical help!

During the depression and WW2, long bond yield fell to the 1.5% cash rate of the FED. The yields kept on slowly falling for 15 to 20 years.

How have Japans long bond yields been going after 20 years, shown any perkiness?

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You've developed a case of falling long bonds, I suggest medical help!

During the depression and WW2, long bond yield fell to the 1.5% cash rate of the FED. The yields kept on slowly falling for 15 to 20 years.

How have Japans long bond yields been going after 20 years, shown any perkiness?

Have to agree wulfgar. New lows in bond yields is probably on the cards, especially if the equities seriously roll over.

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Have to agree wulfgar. New lows in bond yields is probably on the cards, especially if the equities seriously roll over.

In US together with bonds mortgages rates are at record low:

The 30-year fixed-rate mortgage averaged 4.44% for the week ending Aug. 12, according to Freddie Mac's weekly survey of conforming mortgage rates. It averaged 4.49% last week and 5.29% a year ago. The rate is now at its lowest level since Freddie Mac started tracking it in 1971.

The 15-year fixed-rate mortgage averaged 3.92% this week, down from 3.95% last week and 4.68% a year ago. It is also at its lowest point since Freddie Mac started tracking the rate in 1991.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 3.56% this week, down from 3.63% last week and 4.75% a year ago. The ARM is at its lowest since Freddie Mac began tracking it in 2005.

And 1-year Treasury-indexed ARM averaged 3.53% this week, down from 3.55% last week and 4.72% a year ago.

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Have to agree wulfgar. New lows in bond yields is probably on the cards, especially if the equities seriously roll over.

Just trying to get this clear in my mind.

The bond yield rate is what is currently being paid on bonds bought 10 years ago?

or;

The bond yield rate is what will be paid on bonds bought today, when they are cashed in 10 years time?

If it is the former, than those who bought 10 year bonds in 2000 have lost nearly 5% on their investment.

If it is the latter, than all you can expect in return for the next 10 years is around 3.5%!

Or have I got the bull by the horns again???

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Just trying to get this clear in my mind.

The bond yield rate is what is currently being paid on bonds bought 10 years ago?

or;

The bond yield rate is what will be paid on bonds bought today, when they are cashed in 10 years time?

If it is the former, than those who bought 10 year bonds in 2000 have lost nearly 5% on their investment.

If it is the latter, than all you can expect in return for the next 10 years is around 3.5%!

Or have I got the bull by the horns again???

My understanding is that it is what a 10 year bond is yielding relative to its current purchase price.

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