4 ms·

> I act as their investment agent, assigning realistic interest rates Author then proceeds to put 15% annual interest rate...

roberdam 1y ago
11% is a safe interest rate on my country (py), I just got a 14.5% offer for local bonds BBB+
- mlok 1y ago
  py = Paraguay, for those like me who didn't know
- Galanwe 1y ago
  > 11% is a safe interest rate on my country 11% may be the safest bond you have access to, but that doesn't make it _safe_ in absolute terms.
  - roberdam 1y ago
    up to 30k, cover 100% by the central bank
    - Galanwe 1y ago
      Look, you do you, but rest assured that you don't get 11% for no reason.
      - roberdam 1y ago
        I wrote an article (it's in Spanish) in which I took data from the central bank since 1990 and created a tool to simulate various scenarios. The tool includes a column showing the average interest rates on central bank-backed investments. Maybe you might find it interesting. https://roberdam.com/jubilar.html https://roberdam.com/jubilar.html
    - estsauver 1y ago
      So, bonds basically all tend to converge on the same risk adjusted yield. If you're seeing yields that look like this, the market believes the currency will slip or there's repayment risk (relative to USD bonds that are in the 4.75% range.) Imagine you have a scenario where inflation is 0 in currency A and 10% in currency B. Would you rather have a 2% bond in currency A or a 9% bond in currency B? This is why Euro bonds go negative sometimes, when USD interest rates were very low and the Euro was deflationary relative to the dollar, it could push rates even further lower.
- wara23arish 1y ago
  stay vigilant Lebanon was granting 12% rates and everything was fine and “covered” by central bank until it wasnt
- Jommi 1y ago
  the issue is your local currency will lose its value over time
  - triceratops 1y ago
    Is there a (government-issued) currency that doesn't?
    - lucb1e 1y ago
      It's not an inherent feature, but they steer it in such a way so, no, there isn't (at least not for long), unless someone would make a good case for it at some point in the future The interesting question would be what their currency, where this 11% is offered, typically loses year-on-year
neucoas 1y ago
Commenter just discovered that there are other countries and economic realities outside the US/Europe
neilv 1y ago
Where can I get 15% annualized returns, please? (I'm told to no longer bet on even averaging 7% annually, over decades, on US stock indexes.)
- a96 1y ago
  15% yield would be a hell of an arbitrage opportunity if you could get a sensible loan to go along with that.

roberdam 1y ago

11% is a safe interest rate on my country (py), I just got a 14.5% offer for local bonds BBB+

mlok 1y ago
py = Paraguay, for those like me who didn't know
Galanwe 1y ago
> 11% is a safe interest rate on my country 11% may be the safest bond you have access to, but that doesn't make it _safe_ in absolute terms.
- roberdam 1y ago
  up to 30k, cover 100% by the central bank
  - Galanwe 1y ago
    Look, you do you, but rest assured that you don't get 11% for no reason.
    - roberdam 1y ago
      I wrote an article (it's in Spanish) in which I took data from the central bank since 1990 and created a tool to simulate various scenarios. The tool includes a column showing the average interest rates on central bank-backed investments. Maybe you might find it interesting. https://roberdam.com/jubilar.html https://roberdam.com/jubilar.html
  - estsauver 1y ago
    So, bonds basically all tend to converge on the same risk adjusted yield. If you're seeing yields that look like this, the market believes the currency will slip or there's repayment risk (relative to USD bonds that are in the 4.75% range.) Imagine you have a scenario where inflation is 0 in currency A and 10% in currency B. Would you rather have a 2% bond in currency A or a 9% bond in currency B? This is why Euro bonds go negative sometimes, when USD interest rates were very low and the Euro was deflationary relative to the dollar, it could push rates even further lower.
wara23arish 1y ago
stay vigilant Lebanon was granting 12% rates and everything was fine and “covered” by central bank until it wasnt
Jommi 1y ago
the issue is your local currency will lose its value over time
- triceratops 1y ago
  Is there a (government-issued) currency that doesn't?
  - lucb1e 1y ago
    It's not an inherent feature, but they steer it in such a way so, no, there isn't (at least not for long), unless someone would make a good case for it at some point in the future The interesting question would be what their currency, where this 11% is offered, typically loses year-on-year

neucoas 1y ago

Commenter just discovered that there are other countries and economic realities outside the US/Europe

neilv 1y ago

Where can I get 15% annualized returns, please? (I'm told to no longer bet on even averaging 7% annually, over decades, on US stock indexes.)

a96 1y ago
15% yield would be a hell of an arbitrage opportunity if you could get a sensible loan to go along with that.