What would Harry say?
https://www.zerohedge.com/news/2019-08- ... year-bonds
Trump Considering Issuance of 50 & 100-Year Bonds
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
Don't cry for me Argentina...
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
I remember MediumTex talking about this years ago in the context of low rates. IE, even when rates "can't go any lower," longer term bonds would extend the runway.
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
From the government's perspective, I think these ultra long bonds make sense.
If I could lock down ultra low interest rates on my personal debt for 100 years, you'd better believe I'd borrow crazy amounts of money.
It's interesting to think how this would impact the PP. As far as I'm concerned, 50 to 100 year bonds are probably too volatile. Especially with the low interest rates we have currently, which makes bonds in general even more volatile.
Just my opinion though.
I do remember that Browne, in one of his books, said "Just buy the longest term bond you can." Not sure how literally he meant that though.
If I could lock down ultra low interest rates on my personal debt for 100 years, you'd better believe I'd borrow crazy amounts of money.
It's interesting to think how this would impact the PP. As far as I'm concerned, 50 to 100 year bonds are probably too volatile. Especially with the low interest rates we have currently, which makes bonds in general even more volatile.
Just my opinion though.
I do remember that Browne, in one of his books, said "Just buy the longest term bond you can." Not sure how literally he meant that though.
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
I think that the longer term bonds bring the PP closer to risk parity, which is a good thing. I personally would buy some to increase my average maturity. I don't know if I would convert all my long terms to ultra longs though.Smith1776 wrote: ↑Sat Aug 17, 2019 2:49 pm From the government's perspective, I think these ultra long bonds make sense.
If I could lock down ultra low interest rates on my personal debt for 100 years, you'd better believe I'd borrow crazy amounts of money.
It's interesting to think how this would impact the PP. As far as I'm concerned, 50 to 100 year bonds are probably too volatile. Especially with the low interest rates we have currently, which makes bonds in general even more volatile.
Just my opinion though.
I do remember that Browne, in one of his books, said "Just buy the longest term bond you can." Not sure how literally he meant that though.
- Ad Orientem
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
There is something of a precedent for this. Back in the land of long ago Britain used to issue a type of perpetual bond called a consol. The government could legally adjust the interest paid too, although for most of the 18th and 19th centuries they paid a reliable 3%. References to them pop up a lot in period literature like Jane Austen. Apparently they were very popular investments. See this...
https://en.wikipedia.org/wiki/Consol_(bond)
https://en.wikipedia.org/wiki/Consol_(bond)
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Re: Trump Considering Issuance of 50 & 100-Year Bonds
Indeed. It's also worth noting that with the exception of the period covering the wars of the French Revolution and Napoleon Bonaparte, The UK was on either either a silver or gold standard. From 1816 - 1913 consumer prices and the general cost of living tended to remain either stable or slightly deflationary.MangoMan wrote: ↑Sun Aug 18, 2019 1:10 pmThat, right there would be the deal breaker.Ad Orientem wrote: ↑Sun Aug 18, 2019 12:52 pm There is something of a precedent for this. Back in the land of long ago Britain used to issue a type of perpetual bond called a consol. The government could legally adjust the interest paid too, although for most of the 18th and 19th centuries they paid a reliable 3%. References to them pop up a lot in period literature like Jane Austen. Apparently they were very popular investments. See this...
https://en.wikipedia.org/wiki/Consol_(bond)
Re: Trump Considering Issuance of 50 & 100-Year Bonds
A report on Bloomberg TV today said that recently-issued 100 year Austrian bonds have doubled in price, while their yield has fallen to +0.62%.
I think it shows how far European investors are willing to go to avoid buying German 10 year bunds featuring guaranteed negative interest rates. If interest rates continue to fall for 30 year T bonds (now under a record low 2%), this may be where we in the US are headed too.
I think it shows how far European investors are willing to go to avoid buying German 10 year bunds featuring guaranteed negative interest rates. If interest rates continue to fall for 30 year T bonds (now under a record low 2%), this may be where we in the US are headed too.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"