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40 year turn


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#1 K Wave

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Posted 16 September 2022 - 07:27 AM

Shocking how many people I talk to that have no idea what has happened with interest rates, and think they are going to go right back down.

 

Then I show them 10 year in Log format...and suddenly, the lights go on about the MASSIVE dislocation, and 40 year turn...

Flip that chart upside down and you have a CLASSIC bubble culmination top....

 

This is going to have ramifications for YEARS to come....

 

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The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#2 12SPX

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Posted 16 September 2022 - 08:57 AM

That's a nice chart however doesn't mean that interest rates are going to go straight up to 15%.  Could sit right at these levels for years.....



#3 pdx5

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Posted 16 September 2022 - 09:55 AM

Inflation has metastasized throughout the economy now. Printing excessive money for decades, deficit federal spending for decades, sudden clamping down on oil & coal while green energy infrastructure is decades behind, transportation costs, wage increases, shortage of workers, sending 100's if Billions to foreign war in Ukraine with borrowed money and I could go on and on. Folks, inflation is never easy to cure just like metastasized cancer.
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#4 OEXCHAOS

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Posted 16 September 2022 - 11:32 AM

That's a nice chart however doesn't mean that interest rates are going to go straight up to 15%.  Could sit right at these levels for years.....

I know my TBT position took a while to play out. They really tried to shake me loose.


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#5 jesteronyer6

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Posted 16 September 2022 - 11:46 AM

I am a car dealer, the rates for 600 range credit scores are way up, the banks are scared I'm sure due to their under performing portfolio's. I know they are taking it in the shorts at the auction on the repo's, the book has taken some huge swings to the down side. I can't imagine what the default mortgages are doing to them. Top all of that with people using their revolving debt to help buy groceries etc.. this is a recipe for disaster 2008 style.


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#6 pdx5

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Posted 16 September 2022 - 04:02 PM

My kid has 30 year fixed mortage at 2.75%. With mortgage rates now north of 6%, I wonder how the lender can stay in business with mortgages signed off at lower than 3%. 


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#7 SemiBizz

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Posted 17 September 2022 - 09:00 AM

It's a CYCLE - people have to get over it... I remember telling my R.E. Broker in early 80s when Mortgage Rates were in the teens, that there would be a day long off in the future when rates would fall below 5%. Of course, she never believed that would happen and it did.  People's brains cannot assimilate the fundamentals that would cause these events, but they do happen.. the same is true today, when I tell people to get over it this time... because we're going to

 

DOUBLE DIGITS -

 

INFLATION

INTEREST RATES

UNEMPLOYMENT

 

It's a long cycle 40 years, don't try to out-think the cycles.  You won't be able to anticipate the fundamentals that will bring this about, but if you concentrate on the outcome, without having to understand why, you will be prepared.


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#8 Carl

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Posted 17 September 2022 - 12:22 PM

because we're going to

 

DOUBLE DIGITS -

 

INFLATION

INTEREST RATES

UNEMPLOYMENT

 

SemiBizz

 

 

In your professional opinion how long time will take to get there? + or -

 

Tank you



#9 gm_general

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Posted 17 September 2022 - 09:52 PM

Total US debt was miniscule in the 1980 era, now it is $91.5T. In 2000 debt had ramped up to levels that considering real inflation we started a recession that has never ended. This was caused by excessive debt service costs. The only way to keep things going was to lie about inflation and to ratchet down rates and to keep adding more debt. Even with kludged numbers whenever total interest costs per year exceeded 20% of total GDP there was a recession. Now with debt as high as it is with 0% base rate that interest cost is around $3.5T yearly. at double digit rates and 8% added debt yearly and 10% of corporate debt rolling over yearly and government debt doubling every 8 years the US will be plowed under in short order.