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Imagine 10 yr. T-notes at 7%.

Discussions about the economic and financial ramifications of PEAK OIL

Imagine 10 yr. T-notes at 7%.

Unread postby Jack » Thu 20 Sep 2007, 14:37:35

It closed at 4.53% last night. If it were to advance over some period of time, to 7%, the effects might be interesting.

I got this number from a point and figure chart LINKED HERE

P&F charts do not consider time, so there is no indication when the target will be reached. It could easily be months, years, or more. Also, one should take such mechanical predictions with a great deal of salt - but it might well be something that would guide traders and portfolio managers.

Just a little something to add to the doom. 8)
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Re: Imagine 10 yr. T-notes at 7%.

Unread postby Byron100 » Thu 20 Sep 2007, 14:57:11

$this->bbcode_second_pass_quote('Jack', 'I')t closed at 4.53% last night. If it were to advance over some period of time, to 7%, the effects might be interesting.

I got this number from a point and figure chart LINKED HERE

P&F charts do not consider time, so there is no indication when the target will be reached. It could easily be months, years, or more. Also, one should take such mechanical predictions with a great deal of salt - but it might well be something that would guide traders and portfolio managers.

Just a little something to add to the doom. 8)


Why wimp out at only 7%?? I wanna see a repeat of what happened in the early 1980's, when rates went all the way up to 18% and higher...now, that's some serious stuff!

My question is, we went through that but by 1984, we were booming again...so why would interest rate rises to 7, 8, 9% be a cause for doom? People spending less, saving more...sounds like the kind of trend that could really help us out as Peak Oil starts to bite...but then again, what I know? :P
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Re: Imagine 10 yr. T-notes at 7%.

Unread postby evilgenius » Fri 21 Sep 2007, 03:32:15

7% might be a lot better return then than any other investment. Going forward. I think we are looking at extremes of both inflation and deflation in especially the US economy. House prices will collaspse but rent might stay the same, or increase. Food and energy will definetly go up, but other staples could actually drop in price looking to find a price point where the new order allows them purchase. A person leading a disciplined life, not an alcoholic or addict in any way, conserving resources, owner (not renter) of property might do well with a 7% return. You would do better with wind or solar supplementing your energy usage. The trick is would there be enough left to reinvest or would it all get eaten up with the simplest kind of living? Buy your bicycle and spare tires today while Walmart is still open, eh.
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Re: Imagine 10 yr. T-notes at 7%.

Unread postby wisconsin_cur » Fri 21 Sep 2007, 04:14:42

$this->bbcode_second_pass_quote('evilgenius', '7')% might be a lot better return then than any other investment. Going forward. I think we are looking at extremes of both inflation and deflation in especially the US economy. House prices will collaspse but rent might stay the same, or increase. Food and energy will definetly go up, but other staples could actually drop in price looking to find a price point where the new order allows them purchase. A person leading a disciplined life, not an alcoholic or addict in any way, conserving resources, owner (not renter) of property might do well with a 7% return. You would do better with wind or solar supplementing your energy usage. The trick is would there be enough left to reinvest or would it all get eaten up with the simplest kind of living? Buy your bicycle and spare tires today while Walmart is still open, eh.


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Re: Imagine 10 yr. T-notes at 7%.

Unread postby Doly » Fri 21 Sep 2007, 07:34:30

$this->bbcode_second_pass_quote('evilgenius', 'I') think we are looking at extremes of both inflation and deflation in especially the US economy. House prices will collaspse but rent might stay the same, or increase. Food and energy will definetly go up, but other staples could actually drop in price looking to find a price point where the new order allows them purchase.


You may have a point there, Evil. I hadn't considered that possibility, but you may be right. We may get a situation where inflation and core inflation widely diverge.

I don't quite follow why you say house prices would go down but rent wouldn't. Can you explain?
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Re: Imagine 10 yr. T-notes at 7%.

Unread postby nth » Fri 21 Sep 2007, 13:17:08

I don't mind seeing 7% 10yr T bonds.
It will not cause doom, unless it goes to 7% in a short period.
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Re: Imagine 10 yr. T-notes at 7%.

Unread postby Plantagenet » Fri 21 Sep 2007, 15:36:51

$this->bbcode_second_pass_quote('Byron100', ' ') I wanna see a repeat of what happened in the early 1980's, when rates went all the way up to 18% and higher...now, that's some serious stuff!...People spending less, saving more...sounds like the kind of trend that could really help us out as Peak Oil starts to bite...but then again, what I know? :P



The high interest rates were accompanied by high inflation, so the actual ROI after subtracting inflation wasn't much better then you'd get at current interest rates. Meanwhile, the stock market tanks because earnings growth has a tough time beating double-digit inflation, and people who have retirement accounts etc. that aren't indexed to inflation get wiped out. Working people tend not to save, because they can see the prices of cars etc. going up so quickly that it seems smart to make purchases as soon as possible before the prices rise even further. 8)
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