You must answer most important question.....where will cash go? will it flee to the bund or maybe greek bond, perhaps the gld, or that old standby under the mattress. the housing road to riches market collapse has resulted in corporations valuing cash greatly.... they refuse to "bring cash home" they refuse to use it to expand business or upgrade facilities, they have been hunkering down BECAUSE they are not seeing inspirational growth nor conditions to change plans of hunkering down...., the salaries they pay are what THE MARKET values growth, sales, cost of healthcare, taxes etc....now if government was deciding wages and benefits it is quite possible that businesses would go out of business, and just as the thinking that dropping oil price (significant declines) benefits the economy, the market (read investment cash) is not buying that.
cash is not simply buying treasuries, cash needs safety.
this is a strange attitude! the fed is concerned [PRIMARILY) with the continuation of the economy.. if this economy goes into deflation or markets indicate a serious collapse the ramifications go FAR FAR BEYOND your consideration of being "unfair to savers and the elderly" you cannot be serious!!!!!!!
your comments would better be served if government (read politicians, our tax code, our growth prospects) .......... seriously addressed the issues affecting bond rates...maybe you should mail the folks in washington, d.c.
market seems a bit schizo, the confusion or reality may well be as you post. if you look at the negatives, the worst which I believe is the pumping to sell treasuries all last year.......a few contrary voices in the wilderness rejecting the kool-aid. the second worst is I believe, the length of time before we know what kind of government awaits us two years down the road. with either more of the same coming, or as alternative the "other" party offering a re hash of bush, it is looking like cash may resist being invested. how can treasuries avoid being held? it seems to be treasuries by default.
if you "would have already retired but for the low rates" at what point in the rate cycle would you reconsider your decision? also, since you are a saver, unusual in the USA, if deflation which is a major worry for economies worldwide actually becomes reality then your savings will make you rich. your dollars will become golden.
The issue has been that the Germans DO NOT want Draghi to do QE. the German Central Bankers insist this should not happen, I believe the matter has been taken to ECB court for decision.
If you put a "very high tax" on the "rich people" to reward the people who "own the government" what happens (as margaret thatcher said, when you run out of rich people who refuse to be productive enough to have income taken away? if you are searching for a way to "print enough money to balance out things" then it is understandable why we have government as we do. There are certain countries having great wealth to distribute to their citizens.. Norway is one that comes to mind. This is due to vast oil resources lying offshore and for many years bringing their people an extremely high standard of living, all expenses paid from birth to grave. But this is a tiny indigenous population in a land of great resources. Your proposals sound quite similar to ones heard during the time of Stalin and communism..... perhaps you were unaware of the desire of people for freedom FROM government? which was the foundation of the origin of OUR country whose founders and philosophy you might find unappealing? perhaps the USA does not endure as its historical origin, but THEN what a revolting development.
well, one effect of the ecb easing is already roiling markets, the germans are vociferously against this, (they are part of the euro union though) but the swiss (NOT part of the euro union) have spoken with action. the swiss currency had been tied to the euro requiring the swiss to buy massive euros to keep their cash from being debased and to aid swiss exporters who would be forced to deal with much more expensive cost of business... today, the swiss are no longer tying their currency to the euro, the swiss franc has appreciated 30 percent against the euro after this unexpected move, and the swiss market declined 10 percent (due to higher franc valuation)... the DEFLATIONARY effects to others however have yet to be determined. the swiss are determined to avoid negative effects.
jail the bankers and those who defrauded the public? how about the politicians made all this possible most of whom by the way, flew the coop.
We have government that the people voted in. the central bank attempts to avert economic instability.
Voters wish list is fulfilled with taxpayer (wagonpullers cash) with costs in the trillions going to social programs, education, free houses with loans guaranteed by taxpayer, ..social security funds long gone stolen and replaced by i.o.u.'s, These may finally be hitting the fan but the solution is replacing politicians enabling this massive debt...when George Bush 1 stated in his campaign promise, READ MY LIPS, NO NEW TAXES, to the cheering crowd, he got the presidency.. His words were an obvious lie, he lost re election, Perot got 20 percent of the vote, and thus over the next twenty years tax rates state and local now over 50 percent once more. ... there were attached to the "community development program" making homes very freely available, laws that came close to bankrupting a country... the depression of the 1930's happened not overnight but as an accumulation of negative economic events taking years but today with the oil price collapse, the weak philly fed numbers, the rise in POG the swiss currency moves refusing to tie their cash to the collapsing euro, the markets are very edgy.
not having any relevant knowledge of the bond market only that during prosperous times (or perceived future prosperity) bond yields go up.. during mr greenspans tenure and warning of too much bullishness, that fed TIGHTENED causing the year 1999, yr 2000 market crash. then the lowering of rates as the antidote.
But, the real rate of interest, (relative to the rate of inflation) and not the nominal rate (what lenders charge) is what is important in determining rates and it is this difference that is meaningful for treasury yields. And treasury rates may not even be the most important investment determinant, (read fiscal) the webpages discussing ...the great depression of the 1930's and its origins" are excellent in broadening understanding of complex economic events, what policies should have been avoided, and what ultimately reversed the stagnation.
perhaps the volatility of market crashes followed by triple digit advances as quickly being dumped, is warning enough for some that there are plenty of traders cashing in on unsophisticated investors, clever traders refuse to be bag holders. many "ordinary folks who had excellent investment advice were buying treasuries all last year and they prospered mightily. of course this advice does not profit the firms pushing equities (though they may have been closet bond bulls protecting their own cash reserves). even alcoa with some earnings potential shown finished down today. .
subsidies need life after subsidies. this economy needs to take off, driving energy prices up rather than in the tank.. while markets were on a tear there was fear of strong growth leading to inflation, but if lower prices rule in the future and the economy weakens while salaries shrink, and retailers are pressured, electric cars may be placed on hold for all but wealthy greens. the rest will buy carbon based
it seems to have predicted correctly the continuing strength of the treasury bond market you found yourself alone in a sea of bondbashers... very few voices were bullish on bonds while most talking heads were believing in strong economic growth accompanied by robust possibility of inflation. more vocally today there is less fear of challenging job numbers, salary levels, inflation potential and production levels.........what is missing is business sense that investment is necessary.....with such credentials it sometimes is better not to speak too loudly.
if retired folks have money they should be mostly in bonds.
you keep blaming the FED for this economy and the low interest rate environment when it is government economic policies that have failed to foster conditions for yields to rise...
what is necessary is for business to use capital to invest in their own business due to demand which must be evident for risk taking. this is when the stock market rises. when the banks loaned huge sums of cash for home purchases which could never be repaid unless house prices continued rising and then ONLY because the loans were guaranteed by the taxpayer the worthless loans took many financials down and the ordinary investor with it... if deflation becomes an issue bonds are essential and dollars are valuable.
it seems as if you wish the fed to raise rates or have raised rates last year or even earlier.
or perhaps you simply wish the fed to announce their absolute intention to push rates up at one particular date? but today some weak economic data emerged, every one showing declines.
if the fed is on a rate raising course, (not deceiving the public?) and rate increases make the economic data show further deterioration, perhaps pushing this economy into recession, then the rates you find favorable will crash under their own weight and the TLT continues strengthening.., the fed cannot create prosperity or economic strength but they have the power to cause recession.