1. I was baffled that the US government wasn't auctioning off as many 10-30 year bonds as they possibly could over the past decade. I was also baffled that they didn't auction off 50 year bonds to pay for the infrastructure spending that has very long lifespans. I would have stuffed as many of those 10-50 year bonds into the market as it would take from 2012 through 2021. They should have pushed the duration of government treasury bill/bond fund to 10 years.
2. The average homeowner figured this out over the past few years which is why new mortgage rates are skyrocketing (all the way to 1990s rates!) but the outstanding mortgage average rate is close to the lowest on record. 70% of mortgages have rates less than 4%. The dumb money appears to have been the smartest money in the market.
3. You wrote "Changing the rules, or just eroding your points with inflation, is part of the game we sign up for. " This is true for pretty much anything ranging from Social Security, pensions, Medicare and Medicaid, to retirement accounts with rules that are all dictated by the federal and state governments. Corporations have already changed the rules on who can get pensions so that is down to only a very few. I have no idea what is going to happen to Social Security when the Trust Fund runs out, but it is not going to be pretty. We will be collecting SS by 2033, so when we refinanced our mortgage in 2021, we went with a 15 year loan at 2.625% (half of current money market yields). One of the reasons was that it would come due in 2036 and finishing the mortgage payment and interest would partially offset the SS payment drop that is almost certainly coming for us around 2033. I think they will figure out how to maintain SS payments as promised to people receiving less than the median SS payment, but everybody above that should be prepared for a haircut. The uncertainty about that will have a growing impact on savings and spending rates of retirees and near-retirees over the next decade. Over 65 people already make up a large percentage of consumer spending - a reduction on that over the next decade could have a serious impact on economic growth.
Considering the fracturing of multi national organizations and the globalization of production do government levers of economic, trade, fiscal and monetary policy have any chance of maintaining the level of influence they once had?
1. I was baffled that the US government wasn't auctioning off as many 10-30 year bonds as they possibly could over the past decade. I was also baffled that they didn't auction off 50 year bonds to pay for the infrastructure spending that has very long lifespans. I would have stuffed as many of those 10-50 year bonds into the market as it would take from 2012 through 2021. They should have pushed the duration of government treasury bill/bond fund to 10 years.
2. The average homeowner figured this out over the past few years which is why new mortgage rates are skyrocketing (all the way to 1990s rates!) but the outstanding mortgage average rate is close to the lowest on record. 70% of mortgages have rates less than 4%. The dumb money appears to have been the smartest money in the market.
https://twitter.com/GSORealtors/status/1678414152803418113
3. You wrote "Changing the rules, or just eroding your points with inflation, is part of the game we sign up for. " This is true for pretty much anything ranging from Social Security, pensions, Medicare and Medicaid, to retirement accounts with rules that are all dictated by the federal and state governments. Corporations have already changed the rules on who can get pensions so that is down to only a very few. I have no idea what is going to happen to Social Security when the Trust Fund runs out, but it is not going to be pretty. We will be collecting SS by 2033, so when we refinanced our mortgage in 2021, we went with a 15 year loan at 2.625% (half of current money market yields). One of the reasons was that it would come due in 2036 and finishing the mortgage payment and interest would partially offset the SS payment drop that is almost certainly coming for us around 2033. I think they will figure out how to maintain SS payments as promised to people receiving less than the median SS payment, but everybody above that should be prepared for a haircut. The uncertainty about that will have a growing impact on savings and spending rates of retirees and near-retirees over the next decade. Over 65 people already make up a large percentage of consumer spending - a reduction on that over the next decade could have a serious impact on economic growth.
Considering the fracturing of multi national organizations and the globalization of production do government levers of economic, trade, fiscal and monetary policy have any chance of maintaining the level of influence they once had?