Re: [TSP_Strategy] Re: Greenspan's warning about bond bubble

 

I think the FED can set some rates and target rates, but rates are also set by the market. If buyers of bonds don't think there is enough return for the risk or perceived risk they won't buy bonds except at large discount. If the govt that need to sell bonds to maintain annual deficit and debt and there are no buyers for the bonds the only way to sell the bonds is increase the projected return. I seem to remember in 1981 or 82 they shot up to rates in the teens. Folks that bought annuities then were in good shape. 

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On Aug 4, 2017, at 10:39 AM, poptopwater@yahoo.com [TSP_Strategy] <TSP_Strategy@yahoogroups.com> wrote:

 

"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."

I don't understand this. Aren't interest rate hikes controlled by the FED and Central Banks?  Is he implying 'they' will run up interest rates rapidly on purpose?

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Posted by: Arthur Jeyes <artjeyes@gmail.com>

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