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I realize that this seems to match with your experience of disappointment, but there really is a lot to bonds, a lot one could learn. How bonds do will depend on many things, like:
1. their duration
2. their credit risk
3. whether the issuer defaults
4. the rate of interest the bond is paying
5. whether the bond is callable
6. capital appreciation/depreciation based on whether interest rates move up or down
Lately, bonds have actually been giving a very, very good return. Will that continue? Not necessarily. Certainly not forever. Eventually there will be a time when bonds will do badly. But for now, this is their day in the sun. Each of the four Permanent Portfolio assets gets its day in the sun. That's why to own all four.
DFF, former fellow-traveler in 1000% agreement with you, has now decided that deflation is inevitable:
Can't depend on anything nowadays. Sure-thing prognostications suddenly reversed. What will the crystal ball tell us tomorrow? You'll have to ask someone else -- I smashed all of mine.
Umm, saying something like that is what we on Planet Earth call a Prediction.
How could you have possibly made your position more clear? It was crystal clear to me, and to anyone else reading. "Don't buy long-term bonds. Interest rates are virtually zero, they have nowhere to go but up, and thus bonds have nowhere to go but down." The prediction is simple and clear. The advice is simple and clear. It just happens to have been wrong.
Now you can say "no, no, no, that's just in the short term. In the long term I'll be proven right. You'll see." You can say that. And you do say that. And when you do, you start to sound an awful lot like Peter Schiff. You've been saying this about bonds at least a couple years, eh? Two years is a pretty long time, Zippy, eh? When will your "long term" finally arrive? How long do I have to wait? Ten years? Fifty?
Last edited by helmuth_hubener; 10-17-2014 at 11:14 AM.
A prediction says something will definately happen. Saying something is possible or even likely is not a prediction in my book. If I said "gold is going to $1000", that is a prediction. "It could rain tomorrow" means it could also not rain. "It will rain tomorrow" is a prediction. A prediction can also include a date. "Interest rates will rise before October 15th". I did not say interest rates would rise in the next month or any particular time. I am concerned with long term. But if you want to declare victory for a short term gain, congratulations. I was wrong. You win.
By your ridiculous redefinition of prediction, Peter Schiff has never made a prediction in his life.
But... guess what? Actually, he has.
A real man would simply own up, matter-of-factly, and admit: "Yes, my advice doesn't seem too good based on the last couple years of performance. You would have been better buying the bonds after all. My expectations have not yet come true -- that is, I was wrong."
You apparently can't do that. And you have retreated into the "but, but, but: long term" rear-guard action, just like Peter Schiff and his defenders. So, I am going to start calling you Peter Schiff. I think it fits you better.
So, Peter Schiff, how long is your "long-term"? How many years does your advice have to fail and lose money before I can finally declare you to be wrong? Twenty? Seventy? A thousand?
Plus, ZippyJuan was wrong regarding higher rates results in lower bond prices. It's the other way around. Bond prices drop, which raises the interest rate to bring the bond to par value. It's the price of the bond that affects interest rates--not the interest rate that affects the bond price.
Bond interest rates move inversely to their price. A bond has a face value- what it is worth at maturity. If a bond has a face value of $10,000 and is sold for $9,000 the yield will be ten percent. If you hold that bond until it matures, you get that for you return. If you decide to sell your bond before it matures, how much you can get depends on what new bonds are going for. If bonds are now yielding 20% (meaning interest rates are higher), a person can buy a new bond for $8,000. They aren't going to offer you $9,000 for yours (ignoring anything like coupons which have been paid on your bond already) so if you want to sell yours, you are going to have to ask $8,000 (or less). That means that if you do sell your bond, you would lose $1,000 of what you paid. The rise in interest rates means the bond you hold is worth less. It wasn't the change in the value of your bond which caused interest rates to change but the change in interest rates which changed the value of your bond.
You are right that on newly issued bonds the price determines the interest rate but on bonds people already have it is the prevailing interest rate which changes their value. If you sell your bond. If you keep the bond until it matures, its value is the face value and that does not change.
Last edited by Zippyjuan; 10-17-2014 at 08:28 PM.
I don't think he's government. If I had to bet, I'd say he has a relationship with the Anti Defamation League or similar organization. Could be formal or informal. He might get paid, or maybe he just donates his time. Among other things, I have seen a Wikipedia editor by the name of Zippy who writes articles on Jewish figures and subjects.
The ADL is a savvy group that strongly recognizes the intersection between language, discourse, and the internet. Nothing unique about that. A wide variety of groups vie for opinion and attempt to shape public perceptions, but it seems some are more assertive than others. A lot of mainstream medical professionals, for example, edit Wikipedia articles and they closely guard their edits (e.g., vaccine articles). They are however, up front about their identities. The really dumb thing about Zip is that he tries to hide it. I asked him his purpose for being here and he declined to answer. He declined to answer who he voted for on a political forum. I even proposed a bet with him where the loser would leave the forum forever. He declined.
Seems to me he has something to lose if he left this board. I've never seen him post anything pro-liberty. Most of his posts are purposely contrary. I really don't even think it's a big deal if someone says they're from some organization that might be at odds with liberty or people here. Geez, at least be a man about it instead of cowardly skulking around here like a cockroach.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Interesting theory. How many of my posts have been about Israel or Jews? Either pro or anti?
Last edited by Zippyjuan; 10-17-2014 at 05:32 PM.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Thinking about enrolling?
By the way, http://www.bloomberg.com/news/2014-1...n-lingers.html
Treasuries fell for a second day, pushing 10-year yields up the most in one month, as a report showed housing starts rose more than forecast last month, damping concern the economy may need further stimulus.
The benchmark 10-year securities extended losses as consumer confidence in the U.S. unexpectedly rose in October to the highest level in seven years. U.S. government securities are headed for a weekly gain as concern global growth is losing momentum stoked bets the Federal Reserve will delay an interest-rate increase. Today’s rise in yields pared a move this week that sent 10-year yields to the lowest level since May 2013.
“As domestic numbers get better, it makes people feel better,” said Kevin Giddis, the Memphis, Tennessee-based executive vice president and head of fixed-income capital markets at Raymond James & Associates Inc. “We went through that period of time where it was a great scare in the market.”No, I am not claiming that my "prediction" was right since I did not actually make a prediction and it is short term. Long term is what matters.Hedge-fund managers and other large speculators increased bearish bets on 10-year note futures to the most since May, according to U.S. Commodity Futures Trading Commission data. The number of net-short positions reached 123,168 contracts as of Oct. 14, an increase of 30,383 from the week before.
Last edited by Zippyjuan; 10-17-2014 at 07:56 PM.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Surely if I worked for them I'd know, right?
So, just looked on ADL website, these are the categories of major issues they claim to focus on
Anti-Semitism
Combating Hate
Israel & International
Civil Rights
Education & Outreach
Which of these did either myself or Zippy ever post about?
Last edited by PRB; 10-19-2014 at 01:18 PM.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
That's actually pretty funny. "TheCount" is the funny one in the trolling quartet of Zip, PRB, MaybeMaybeNot, and TheCount.
Disrupt, Deny, Deflate. Read the RPF trolls' playbook here (post #3): http://www.ronpaulforums.com/showthr...eptive-members
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