Anyway still just a sideshow, comparisons are not valid pre 71'.
Yes, well bears do have a tendency to dismiss as 'invalid' any data that doesn't fit their narrative. So apparently houses should 'mean revert' to prices seen in some utopian period 60 years ago, but when it comes to interest rates, any time prior to the 70s is an 'invalid' comparison.
Shadow- There really is no narrative here, I do not doubt the ability of Central Banks to hold interest rates at any level they see fit.
There is no market for money. The price of capital is in complete disconnect with the risks. This system will continue until it fails.
I am merely pointing out the absurdity of your claim on the historic level of interest rates. There can be no analysis between the period pre 71' and now.
Enjoy The Ride!
The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.” ― Friedrich A. von Hayek
"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.
I am merely pointing out the absurdity of your claim on the historic level of interest rates. There can be no analysis between the period pre 71' and now.
I think it's absurd to dismiss most of the past century as non relevant.
While we're at it, why not dismiss the 70s-90s because interest rates and inflation were unusually high.
Then we'll also dismiss the late 90s and post-2000 period because there were dot.com bubbles, housing bubbles, 911 and the GFC.
So now we've dismissed all of history as being equally irrelevant, and hence, also equally relevant.
The fact still stands - interest rates stayed around current levels for a very long period of time prior to the 70s.
Therefore current rates are not historic lows, nor are they emergency lows.
Shadow- I express sincere compassion for your partner.
Economics is not a science, but we can say the monetary system was subject to a major change in 71'.
Enjoy The Ride!
The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.” ― Friedrich A. von Hayek
"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.
Your data is flawed as it assumes all things remained equal through that period. We are at historic low interest rates from the end of the gold standard.
I think it's absurd to dismiss most of the past century as non relevant.
You are confusing relevance and equivalence. Any year between 1931 and 1971 is comparable, because the monetary system was equivalent. Post 1971 to present is comparable because the monetary system post 1971 to present is equivalent. Yes, interest rates were very stable until the gold standard ended. Prices were also mean reverting. Since the end of the gold standard we have experienced exponential price growth, wild volatility in capital markets, an accelerated boom and bust cycle, and an unprecedented level of mal-investment.
Quote:
While we're at it, why not dismiss the 70s-90s because interest rates and inflation were unusually high.
Then we'll also dismiss the late 90s and post-2000 period because there were dot.com bubbles, housing bubbles, 911 and the GFC.
So now we've dismissed all of history as being equally irrelevant, and hence, also equally relevant.
Did you run out of straw?
Quote:
The fact still stands - interest rates stayed around current levels for a very long period of time prior to the 70s.
No disagreement there. The move off the gold standard has certainly introduced dangerous volatility in capital markets. I think ETR agrees with you how economically destructive that has been.
Quote:
Therefore current rates are not historic lows, nor are they emergency lows.
In the period of history that included the current monetary system, i.e. 1971 to present, they are historic lows.
Your data is flawed as it assumes all things remained equal through that period. We are at historic low interest rates from the end of the gold standard.
Shadow's data is NOT flawed. It makes no assumption that all things (whatever you are referring to) remained equal. The charts posted by Shadow show what they say they show.
The statements which Shadows chart correctly refute were not made with the caveat relating to the gold standard which you have later added.
Your own chart however IS flawed. It assumes that the fiat currencies have no return and that the currency was stuffed under a mattress. Since 1980 gold has lost far more purchasing power than US$ or AU$ placed in a deposit account.
Here's Shadow's unflawed and revealing charts again:
Your data is flawed as it assumes all things remained equal through that period. We are at historic low interest rates from the end of the gold standard.
This Chart posted by Gossamer is particularly interesting, the period where currencies acted as stores of value 81-2001 reflect positive interest rates, or a level at which the decay of Fiat was halted.
The current level of interest rates worldwide would suggest the Gold bull run is far from over.
Enjoy The Ride!
The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.” ― Friedrich A. von Hayek
"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.
It's over. The gold bubble peaked almost two years ago...
Only if deflation takes hold, or interest rates rise.
I expect Gold will possibly take another leg down to $1150 here it represents great value, if you believe Central Banks and Governments will stop at nothing to produce inflation.
I don't think anyone told the Chinese the Bull run was over
The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.” ― Friedrich A. von Hayek
"I, on the other hand, am a fully rounded human being with a degree from the university of life, a diploma from the school of hard knocks, and three gold stars from the kindergarten of getting the shit kicked out of me." Blackadder.
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