^ So Russia dumped US treasuries as a macho move, F U Merca, and then secretly bought them back as the safe heaven holding?
this is why I think treasuries will top out at or below 4. Potential GDP is low 2s according to the fed and official inflation will remain low. So we’re basically going back to last cycle with asset price inflation but no real growth.
So you’re a buyer at 2.5%?
Depends in what account. In my retirement account (30+ years), I’m close to 100% equities.
In my TFSA, I increased my bond allocation.
BTW, the 10 year Treasury total return is over 6% YTD (14 % on the 30 year), ahead of the equity market so far. In the short to medium term, can be wise to get in depending where you get in.
You sound like Grantham lol He’s been preaching that growth is probably not going to be what people are expecting for the foreseeable future.
Some economic 101 to all. Lotta inflation is likely coming by year end. the food portion in PPI moved a grip this april vs flat for the entire previous year. PPI is a good predictor of future CPI, and most of CPI movements are due to food and energy. And of course CPI tracks inflation. Additionally, Im pretty sure yall have heard that wages are rising, and growth is likely to spring back 2Q. So put two in two. It just makes sense.
oh i get it. inflation is coming. thanks.
Winter Inflation is coming.
Time to buy some metals?
There will be no inflation (CPI above 2.5%) for a long, long, long time.
What, do think this is Japan or something?
Yes, but for different reasons.
Japan has an ageing, declining population and no immigration due to xenophobic policies.
The West will not have enough private job creation to absorb the population growth while the public sector will take advantage of the retiring boomers by only replacing 1 out of every 2 retirees, if that. Those entering the workforce are screwed. No jobs and high debt (both private and public). This is the generational deficit.
^ Where is your 100% equities retirement portfolio going to get any return from then?
In the long run, it’s still wiser to be in equities. Humanity finds a way to reinvent itself. It survived world wars, depressions, great famines and diseases. And the market will most likely price it in before you do. At some point, there will be a catalyst that will propel us forward. I just don’t think the “go to school, get a degree and find a good job” model works for most anymore. Today’s youth (including the 50% unemployed in some European countries) will have to tinker with that model …and they will in the long run.
In the short run, I’ve learned not to fight the Fed. They are throwing money around and pushing investors to go in risky assets, more so than in any other period of its existence.
ahaa right you are. in long run equities are best. In the short run, i’m on the side that no one really knows. Just our best guess. haha. I’m sure even the well informed fed feels the same way.
Go to school, get a degree in STEM, and find a job, works as well as, if not better than, ever in the US and Canada, no?
Wow, looks like it’s rough for STEM as well according to these guys. http://m.nationalreview.com/article/378334/what-stem-shortage-steven-camarota http://www.breitbart.com/Big-Government/2014/05/20/Report-U-S-Has-Surplus-Not-Shortage-of-High-Tech-Workers
If we can’t blame unemployment on lack of STEM skills, what’s left to blame it on? I guess government in some way.
Immigrants and lazy millenials.