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Hmmmmmmmm....... As I have not yet printed my PhD paper, to hang onto the wall; from an internet site, I am only able to express an opinion based on something less.
Greenspan noted: "The former central bank leader — nicknamed “The Maestro” by his supporters — said he worries the current economy could be heading on a path similar to 1979, when the 10-year Treasury note was yielding around 9 percent before surging dramatically, gaining 4 percentage points in just a few months."
I will note again, whether acceptable to anyone or not; this period (post June, 2007 to date) is what it is and to reflect back upon what was in place (I well remember) in 1979 are data points and of little value today, June 4, 2012.
In 1979, China was still inside its walls; at least relative to global commerce. South America was a political and social mess still full of tyrants and killers (this started to change in Brazil in 1982). The old Soviet Union was, well, still the old Soviet Union. Europe still had banks where one would could stand outside to view what the current exchange rate was for the day. Some people would still approach a known American and offer an above market rate of exchange into the local currency for a nice, clean crisp U.S. $100 bill. Many American states were still full of manufacturing facilities, which supported even many more, smaller parts vendors and the multiplier affect of 1 well paid manufacturing job supporting another 4-6 unrelated jobs was in place. More cars from Japan were arriving on the west coast, but not yet in volume of consequence, to the big 3 auto builders. There are many more pieces, of which; many of the old timers here may recall about their area of residence.
Today, living in Michigan; I can still purchase a Chrysler or Dodge mini-van (still made in Canada, too) that has the American name plate and corporate headquarters still in Michigan, controlled by Fiat of Italy and the van contains parts from 100's of vendors from perhaps 20 global countries.
U.S. Treasury issues are held by numerous global entities, as well as a very large quantity held by the Federal Reserve. Whether the global entities like it or not, they are damned if they do and damned if they don't own and/or want this paper. China could push all of their holdings onto the market place; but to what advantage? Recent actions in the global economies still indicate the turd pile of choice for both Treasury and U.S. dollar issues.
Bond vigilantes are nominally considered to attempt to change the money policy(s) of the issuer and/or from perceived credit quality. We may then name them "junk bonds" on a grand scale. Europe is witness to this at this time. Whether anyone considers bond vigilantes to be involved or not is their own choice. I will state that it may be a most simple matter of bonds that not many choose to have at this time and the resulting yields are set.
As to bond folks attempting to alter yields at this point in time in this country is a bit of a stretch; although Mr. Greenspan is apparently pointing to some future date. I could agree with him on this, too. Perhaps some future date, of which; I may or may not see. Mr. Greenspan would have to provide a most large amount of information to convince me why 1979 and June, 2012 have much in common for economic models.
I will agree with the writer on his point; based upon a few of my own points above. Lastly, 1979 and its own mix of what the global economy was then; is just gone and will be a set of data points for the period. It is that simple, in my opinion.
Hey, I may be blowing a bunch of hot air here. Let me know. I am wide open to opinions to help the learning curve.
Comments
As I have not yet printed my PhD paper, to hang onto the wall; from an internet site, I am only able to express an opinion based on something less.
Greenspan noted:
"The former central bank leader — nicknamed “The Maestro” by his supporters — said he worries the current economy could be heading on a path similar to 1979, when the 10-year Treasury note was yielding around 9 percent before surging dramatically, gaining 4 percentage points in just a few months."
I will note again, whether acceptable to anyone or not; this period (post June, 2007 to date) is what it is and to reflect back upon what was in place (I well remember) in 1979 are data points and of little value today, June 4, 2012.
In 1979, China was still inside its walls; at least relative to global commerce. South America was a political and social mess still full of tyrants and killers (this started to change in Brazil in 1982). The old Soviet Union was, well, still the old Soviet Union. Europe still had banks where one would could stand outside to view what the current exchange rate was for the day. Some people would still approach a known American and offer an above market rate of exchange into the local currency for a nice, clean crisp U.S. $100 bill. Many American states were still full of manufacturing facilities, which supported even many more, smaller parts vendors and the multiplier affect of 1 well paid manufacturing job supporting another 4-6 unrelated jobs was in place. More cars from Japan were arriving on the west coast, but not yet in volume of consequence, to the big 3 auto builders. There are many more pieces, of which; many of the old timers here may recall about their area of residence.
Today, living in Michigan; I can still purchase a Chrysler or Dodge mini-van (still made in Canada, too) that has the American name plate and corporate headquarters still in Michigan, controlled by Fiat of Italy and the van contains parts from 100's of vendors from perhaps 20 global countries.
U.S. Treasury issues are held by numerous global entities, as well as a very large quantity held by the Federal Reserve. Whether the global entities like it or not, they are damned if they do and damned if they don't own and/or want this paper. China could push all of their holdings onto the market place; but to what advantage? Recent actions in the global economies still indicate the turd pile of choice for both Treasury and U.S. dollar issues.
Bond vigilantes are nominally considered to attempt to change the money policy(s) of the issuer and/or from perceived credit quality. We may then name them "junk bonds" on a grand scale. Europe is witness to this at this time. Whether anyone considers bond vigilantes to be involved or not is their own choice. I will state that it may be a most simple matter of bonds that not many choose to have at this time and the resulting yields are set.
As to bond folks attempting to alter yields at this point in time in this country is a bit of a stretch; although Mr. Greenspan is apparently pointing to some future date. I could agree with him on this, too. Perhaps some future date, of which; I may or may not see. Mr. Greenspan would have to provide a most large amount of information to convince me why 1979 and June, 2012 have much in common for economic models.
I will agree with the writer on his point; based upon a few of my own points above.
Lastly, 1979 and its own mix of what the global economy was then; is just gone and will be a set of data points for the period.
It is that simple, in my opinion.
Hey, I may be blowing a bunch of hot air here. Let me know. I am wide open to opinions to help the learning curve.
Regards,
Catch
Hi Catch,
An update Just North of you...
http://business.financialpost.com/2012/06/04/forget-about-a-rate-hike-is-a-carney-cut-in-the-cards/
Maybe this will help the Fed get things started...forward this to your congress person
Let's Twist, like we did last summer!