Message from @Zyzz
Discord ID: 396336890552516618
And nobody wants bonds at the current artificially low rate, so the fed is printing money and buying bonds with it. Crazy stuff.
if the fed unwinds their MBS portfolio itll be interesting what it does to long rates
They are stealing purchasing power from savers and forcing that money into bonds.
10-30yr bonds specifically
And there's so much money sloshing around in the stock market because all kinds of cattle are herded into it. Every schmo in corporate america gets like 10% of their pay tied up in government regulations forced into the stock market with the "5% contribution, 5% match" 401k nonsense. The corporations do it because the government taxes them less on payroll if a portion of it is forced into the market. And tax breaks on normal IRAs also forces more people into the market that otherwise would not be in the market.
"I'm gonna steal your money unless you put it in the stock market" is what the government is doing over and over.
They say they need tax breaks to drive saving, but only if it's channeled into the stock market, then they say they need lower interest rates to drive spending. It's nonsense.
In the short term, the US will probably be ok, but in the medium and long term, what would you two say is the “best show in town” for passive investment? Is Europe really in better shape? What about world stocks overall? @Zyzz @Tanner - SC
good question. i lack trust in china although it seems like their economy has the best potential for growth and to become a superpower
i think europe falls tbh. you cannot import low IQ people and expect your human capital to remain as great as it was in previous generations
my mom was on the phone with someone from verizon yesterday. she said it was some haitian woman. needless to say but the lady was as dumb as a box of rocks. my mom was on the phone with her for 2+ hours trying to get something done that should have taken perhaps 30 mins. as soon as she got off the phone with the haitian woman she tells me about it. those are the types of people who are replacing us
perhaps switzerland will do well in the long run. also australia/new zealand maybe
i am waiting for the moment when soverign debt investors start looking at a countries demographics and demographic projections (by race), look at avg IQ by race, and consider those varibles when pricing a country's debt
They probably already are
ok well in 20yrs the risk premium on US treasuries will go way up
So on the question of where to put money for long term investment, will we beat the rest of the world or will the rest of the world as a whole beat us? In your opinion of course, just want to see your perspective as someone on the ground
the US has had tremendous growth since 1980. it will be hard to top that over the next 40 years. and that includes the financial crisis. the US is a mature/developed economy so we have that working against us as well
there are certainly other parts of the world where it'll be far easier to have +4% GDP growth simply if their govts would get out of the way
Argentina used to be one of the world's best economies in the early 20th century (look at demographics and you'll see why). It fell in the 60's due to corruption from the Peron family and hasnt really recovered
if argentina's govt could get out of its own way they most certainly have the human capital to grow at an above avg rate over the next few decades
the question is what will cause these countries to implement the needed reform to have fully functioning economies
Thanks for the analysis 👍🏻
I'm a firm believer in keeping a portion of your assets outside of the banking/equity system.
@Tanner - SC what do you own outside of the banking/equity system? Gold? RE?
@ThisIsChris ^ "govt student loan portfolio $1.37 trillion"
@Zyzz that is bad for students, but is that bad for the overall economy in terms of stock market or whatever? This is going to sound supremely Jewish, but only looking at it autistically from an investment standpoint, it looks like this student loan debt will pressure people to take jobs on terms they might otherwise turndown or renegotiate because they are more at the mercy of their student loan payments. This lack of negotiating power on the part of labor would be beneficial for companies. Thus while student loan debt is bad for working people, I'm trying to understand if it is bad from the POV of hurting investments like stocks
@ThisIsChris I think you are right. The only impact this has is people with debt will not be able to consume as much (need to pay debt) and will be unable to buy homes (which isn't always a bad thing). They will just end up renting rather than buying a home. From an investors standpoint, this will not cause a bubble as they are not allowed to discharge debts in bankruptcy and there are plenty of ways for lenders to garnish wages.
I can see people with debt having less flexibility which will lead to them taking less risks from an employment standpoints (turning down job offers, quitting jobs, entreprenuerial endeavors, etc.)
@ThisIsChris Entrepreneurship is way down partly because of student loan debt, and that’s not helpful for the market.
Also, that’s a lot of capital that would have gone to other more productive uses had the market manipulations not channeled so much of it into overpriced academia.
Every market manipulation has an easily observable benefit for a small sliver of the economy, and a larger unseen detriment.
I highly recommend this book for everyone in this channel, it’s a short easy read:
https://www.mises.org/library/economics-one-lesson
@Zyzz great chart, shows we are at the peak of the boom-bust cycle. We should prepare ourselves while times are good.
Everyone make sure you have enough saved to last a minimum of 6 months of unemployment.
And don’t expect unemployment payments from the government to be a fall-back plan.
Also, the FDIC only has less than 1% reserves for the FDIC insurance on your bank account, so in a crisis, your money will not be protected.
@Tanner - SC#6686 i agree. I have only small credit card debt that i pay off every month and a lot of cash on hand