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This doesn't explain why rates change. The delta can only ever be explained by people choosing to buy bonds instead of what they previously owned, or vice versa
by ikeboy 7y ago
This doesn't explain why rates change. The delta can only ever be explained by people choosing to buy bonds instead of what they previously owned, or vice versa. Those people are definitely not trying never to lose any money at any cost, or they'd have bonds all the time and rates would never change.
- TheOtherHobbes 7y agoRates and prices reflect confidence in the future - essentially faith in the system.
- ikeboy 7y agoNot quite - rates are going down not because people think they won't be paid back, but because they think their alternatives will return less due to lower growth and are shifting investments from there to bonds.
- mraudiobook_com 7y agoMassive amounts of new money is pouring into the system. Step one is save the market, step two is brace for inflation.