What a Yield-Curve Inversion Really Says About the U.S. Economy

Discussion in 'Economics & Trade' started by Thedimon, Aug 22, 2019.

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  1. ronv

    ronv Well-Known Member

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    Consumers have not seen much impact from the current tariffs because they are mostly on component parts. Meaning parts that go into higher price products.
    But he is down to putting tariffs on consumer goods - the stuff you buy at Walmart and Best Buy. The consumer will definitely notice those. That's why he is dragging his feet on implementing them. Xi understands this.
     
  2. Chester_Murphy

    Chester_Murphy Well-Known Member Past Donor

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    It should be illegal.
     
  3. ronv

    ronv Well-Known Member

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    Wow!
    I would suggest that putting tax cuts on the credit card is what should be illegal.
    How do you plan on paying for them?
     
  4. Chester_Murphy

    Chester_Murphy Well-Known Member Past Donor

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    I'm not sure I understand.

    What I mean is, when a bill is written... Let's say in a fantasy world, I write a bill. I want to make a new law. I want everyone to get a lollipop. I know. It's crazy. Just an example to make it simple.

    I turn in my idea to the HOR. Another rep says he wants a new car added to the one lollipop. It's voted on in the house and passes. The new bill goes to the Senate. They review it and say, "Okay, but we want to add a pickup truck", and send it back to the house. The house says okay and then sends it back to the senate, where it passes and goes to the president to be signed into law.

    I think it should be illegal to add anything to a bill. It's extorsion. You can't have your lollipop unless you give me a car and them a truck? Bull crap.

    Write your own bill and ask for a car. Write another and ask for a pickup truck.
     
  5. ronv

    ronv Well-Known Member

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    Our system is based on compromise. It isn't pretty, but sometimes it works.
     
  6. Chester_Murphy

    Chester_Murphy Well-Known Member Past Donor

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    It's wrong. It's akin to extorsion. Sometimes, it's akin to blackmail. It's a form of corruption. And, that's not compromise.

    All of Congress should be ashamed.

    It should be illegal.
     
    Last edited: Aug 23, 2019
  7. ronv

    ronv Well-Known Member

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    Life's hard.
     
  8. Chester_Murphy

    Chester_Murphy Well-Known Member Past Donor

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    Apparently not when you have control of everyone else's money.
     
  9. Pro_Line_FL

    Pro_Line_FL Well-Known Member Past Donor

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    The article did not seem to suggest it. It did suggest that the trade war is a threat.

    As for the economy being strong, the numbers do not agree with it.
     
  10. Zorro

    Zorro Well-Known Member

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    It's about negative yields outside of the US. That means when you loan other governments money, you pay them, whereas the US pays the lender, so naturally the world is pouring money into our bonds, and as they rush to safety, it's pushed the yields down on our bonds that it's inverted yields, which lowers the cost of servicing our debt, in fact, it's lowering borrowing costs across the curve.

    It's gotten so bad overseas, that For The First Time Ever, The $100 Bill Overtakes The $1 Bill In Circulation Volume
    [​IMG]
    Why? Because foreigners, in trying to avoid negative yields, are increasingly parking their net worth in the most conventional store of wealth in the world: Benjamins.

    In a world with $17 trillion in negative yielding debt, and the US increasingly the only source of safe, positive yielding debt...

    [​IMG]

    Those aren't even government bonds, rather investment grade corporates flirting with zero or even negative borrowing costs.

    It's not surprising that foreigners have found US Treasury paper especially attractive. But that's not all: apparently foreigners have been attracted to all kinds US "paper" especially America's currency.

    As the IMF's blog points out, a curious thing has happened in US currency: the $100 bill recently overtook the ubiquitous $1 bill in circulation volume, for the first time in history. In other words, the most valuable banknote in the United States has also become the most widely circulated.
     
  11. Yazverg

    Yazverg Well-Known Member

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    There is no spoon... The yield curve, recession etc simply don't exist in the real world. These are the problems of fund markets which make money out of money. This business in the times of numerous wars doesn't affect the real economy.
     
  12. Mac-7

    Mac-7 Banned

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    Good luck getting the profits out of china and bringing it back to the US

    And never mind the trillions US companies have invested in china

    Besides costing jobs in America the money made overseas represents lost tax money for the US
     
  13. ronv

    ronv Well-Known Member

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    I hadn't heard this. Could you post a link? Wink, wink.

    Yep. And you and Spanky want them to do it all again next year in India. :roflol:

    Just like every other offshore investment.

    I'm sure you think their is a point in their somewhere, but...…..
     
  14. Mac-7

    Mac-7 Banned

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  15. Mac-7

    Mac-7 Banned

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    I would prefer they relocate to America where they belong

    But just denying the chinese economy that benefit is a positive step
     
  16. ronv

    ronv Well-Known Member

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    U mean Guy.
     
  17. ronv

    ronv Well-Known Member

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  18. Mac-7

    Mac-7 Banned

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    In our experience all of these things (and a whole host of other things) are factors in whether the Chinese government will allow money to leave. If you think just doing it corporation to corporation will get the money out, the odds are overwhelming that you will end up being sorely mistaken”
     
  19. ronv

    ronv Well-Known Member

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    Most US manufactures in China don't make money on profits from manufacturing, but from profits made from being able to sell their product for less than the competition at home.
     
  20. Mac-7

    Mac-7 Banned

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    No one can sell for less when all the crap comes from china

    The days of making a killing off lower cost goods are over
     
  21. ronv

    ronv Well-Known Member

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    :roflol:
     
  22. Mac-7

    Mac-7 Banned

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    I see you are speechless

    Which means the topic is getting away from you
     
  23. ronv

    ronv Well-Known Member

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    I am speechless, but not for that reason. :)
     
  24. Mac-7

    Mac-7 Banned

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    I’m a typical consumer who loves America more that cheap stuff from china
     
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  25. modernpaladin

    modernpaladin Well-Known Member Past Donor

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    Anyone who actually does isn't likely to let on about it.
     
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