Posts Tagged ‘note’

“This number (10-year treasury note) is probably the most important number in modern capitalism. It tells us the ‘risk-free’ price of money… which is to say, it tells us the cost of borrowing money, or more abstractly, the price of the future.

The more you borrow today, the more time you will have to take away from tomorrow to pay it back. Eventually, you run out of time… and out of luck.

To put that in more concrete (or wood and plastic) terms, the higher your mortgage rate… the longer you have to work to pay for your house.” -Bill Bonner

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“On Tuesday, the Italian government sold a 2-year note yielding MINUS 0.023%.  We don’t know what is more preposterous: that the Italians were able to borrow money at a negative nominal interest rate or that the press reported this transaction with a straight face….  But as long as rates remain below zero (and they could go lower!) money is not just free… it’s a cost not to borrow!…  Imagine you are buying a house…if a mortgage carries negative interest, it implies that the house (an equal capital value) also has negative value.” -Bill Bonner

Interesting times we are living in….