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Wurzel Of Highbridge

What Happens When Global Yield Reaches Zero?

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As per title,

As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

There seems little point saving or investing if there is no net yield.

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As per title,

As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

There seems little point saving or investing if there is no net yield.

To me the point of saving is that you could live for a certain number of years say, without working, or you could tell your employer to do one if they pee you off too much. Just knowing that you don`t need your job makes it much more enjoyable IMO, and the slight arrogance that you project, smug without being overtly disruptive, pisses managers off big style :) My experience of rent and basics tells me we are in deflation, so I am happy to throw money into premium bonds at the minute, maybe stocks if I ever get round to doing the research properly. IMO the main benefit of saving is that it is a state of mind, a disciplined way to live, much better than the credit fest that has f*ucked up so many lives.

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As per title,

As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

There seems little point saving or investing if there is no net yield.

I guess you have to speculate to accumulate- so the answer is more risk taking in the hope of making gains- and the boys on wall street seem to have endless ingenuity when it comes to creating opportunities to gamble. There's a reason the derivatives market is worth trillions.

When you think about it giving the bankers almost free money while reducing interest rates to near zero was an invitation to gamble rather than make long term investments- so why those in charge of the printing press seem surprised is a bit of a mystery. Or are they only pretending to be surprised?

Wasn't the entire QE, Zirp ect thing just a vast doubling down- an attempt to win back all that was lost in the crash in an orgy of even more crazy gambling?

No wonder the system comes across as schizophrenic - we have 'regulators' in the Central banks talking about reducing systemic risk, while those same Central banks do all they can to fuel a new wave of risk taking in a desperate search for yield. :blink:

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The freeloaders will have to join the rest of us and work for a living?

Saving makes sense even with zero return (discounting inflation, which is a great evil) as you can store some of the value you added while working to live off or make your life easier later. Living pay cheque to pay cheque is irresponsible and must be quite scary.

As it is, this over-financialised system is inherently unfair - the workers work, while the 'owners' - the shareholders, and the investors chasing 'yields' - sit back and relax. Most of the benefit, and none of the graft. And most of them inherit most of their privilege, so you can't even say they earned their position. A great many economic sillinesses (buy to let, stock bubbles, London house prices, high frequency trading, etc. etc.) can be traced back to this idea that people who think they are rich deserve even more money than they already have for doing nothing but move money around. Remember it's all numbers on a computer screen, in the end.

Real capitalists would be setting up businesses - buying equipment and actually producing things. Unfortunately most of them seem unable to 'invest' in anything more than landlordism, tax avoidance, milking the taxpayer, or pyramid schemes.

Ultimately, if everyone is living off their investments then who is collecting the bins?

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To me the point of saving is that you could live for a certain number of years say, without working, or you could tell your employer to do one if they pee you off too much. Just knowing that you don`t need your job makes it much more enjoyable IMO, and the slight arrogance that you project, smug without being overtly disruptive, pisses managers off big style :) My experience of rent and basics tells me we are in deflation, so I am happy to throw money into premium bonds at the minute, maybe stocks if I ever get round to doing the research properly. IMO the main benefit of saving is that it is a state of mind, a disciplined way to live, much better than the credit fest that has f*ucked up so many lives.

State of Mind.

Repped.

Liked.

Plus Oned.

Edited by shindigger

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The freeloaders will have to join the rest of us and work for a living?

Saving makes sense even with zero return (discounting inflation, which is a great evil) as you can store some of the value you added while working to live off or make your life easier later. Living pay cheque to pay cheque is irresponsible and must be quite scary.

As it is, this over-financialised system is inherently unfair - the workers work, while the 'owners' - the shareholders, and the investors chasing 'yields' - sit back and relax. Most of the benefit, and none of the graft. And most of them inherit most of their privilege, so you can't even say they earned their position. A great many economic sillinesses (buy to let, stock bubbles, London house prices, high frequency trading, etc. etc.) can be traced back to this idea that people who think they are rich deserve even more money than they already have for doing nothing but move money around. Remember it's all numbers on a computer screen, in the end.

Real capitalists would be setting up businesses - buying equipment and actually producing things. Unfortunately most of them seem unable to 'invest' in anything more than landlordism, tax avoidance, milking the taxpayer, or pyramid schemes.

Ultimately, if everyone is living off their investments then who is collecting the bins?

And actually creating any "real" wealth.

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The freeloaders will have to join the rest of us and work for a living?

Saving makes sense even with zero return (discounting inflation, which is a great evil) as you can store some of the value you added while working to live off or make your life easier later. Living pay cheque to pay cheque is irresponsible and must be quite scary.

As it is, this over-financialised system is inherently unfair - the workers work, while the 'owners' - the shareholders, and the investors chasing 'yields' - sit back and relax. Most of the benefit, and none of the graft. And most of them inherit most of their privilege, so you can't even say they earned their position. A great many economic sillinesses (buy to let, stock bubbles, London house prices, high frequency trading, etc. etc.) can be traced back to this idea that people who think they are rich deserve even more money than they already have for doing nothing but move money around. Remember it's all numbers on a computer screen, in the end.

Real capitalists would be setting up businesses - buying equipment and actually producing things. Unfortunately most of them seem unable to 'invest' in anything more than landlordism, tax avoidance, milking the taxpayer, or pyramid schemes.

Ultimately, if everyone is living off their investments then who is collecting the bins?

The "worker" has as much chance to benefit from the system as the guy who is sitting in a trading room all day, because all the same information is available on his PC at home (he maybe pays a fee for some of it?) The stock market has probably made multi-millionaires of people who started with nothing, and sent people who inherited millions into poverty?

Today, due to the internet, there is more opportunity than ever for the "little guy" to take part in the money system and benefit from it than in previous generations, it just seems that the sheeple prefer things simple, "BTL is my pension", "property always goes up" ?

Obviously there will always be people who have capital and can sit back without working, and people who need to feed themselves right now, whether because they can`t manage money or they didn`t start out with any. If genetics made everyone a Buffet, then there would be another system in place to supply basic needs, maybe a law that everyone has to do one day a week on the farm/pipeline/care home? (SF story taking shape here I think) but human nature being what it is there will always be someone willing to exchange their labour for some of the currency of the moment, and always be people who prefer working on the farm rather than anyalising the profit potential of the farm?

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The freeloaders will have to join the rest of us and work for a living?

Saving makes sense even with zero return (discounting inflation, which is a great evil) as you can store some of the value you added while working to live off or make your life easier later. Living pay cheque to pay cheque is irresponsible and must be quite scary.....

.....Real capitalists would be setting up businesses - buying equipment and actually producing things. Unfortunately most of them seem unable to 'invest' in anything more than landlordism, tax avoidance, milking the taxpayer, or pyramid schemes.

Ultimately, if everyone is living off their investments then who is collecting the bins?

Yes; in time soon to come.

Yes - save even with trace interest. Everyone is chasing yield in investments at v-high prices (imo).

Yes, but only where there is limited exposure to your overall position (no bankers debt type of startup). Real capitalists are waiting to pick up trophy assets for a few pennies in the pound.

Bomads and BTLers will be eating out of them in the future, I hope.

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nothing will happen

99.9% of the population cant even buy bonds.

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As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

Prices go up :)

There seems little point saving or investing if there is no net yield.

Tell that to the BTL'rs. They just rely on capital appreciation.

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What's a Gilt fund?

That would be a fund under the control of an institutional buyer if I understand correctly.

The fabled institutional buyers are these guys. I see it is a way to enter the market by proxy, less fees of course...puts you at twice the risk of course with the middle man liable to rehypothecate your gains without risk of Prison.

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The "worker" has as much chance to benefit from the system as the guy who is sitting in a trading room all day, because all the same information is available on his PC at home (he maybe pays a fee for some of it?) The stock market has probably made multi-millionaires of people who started with nothing, and sent people who inherited millions into poverty?

Today, due to the internet, there is more opportunity than ever for the "little guy" to take part in the money system and benefit from it than in previous generations, it just seems that the sheeple prefer things simple, "BTL is my pension", "property always goes up" ?

Obviously there will always be people who have capital and can sit back without working, and people who need to feed themselves right now, whether because they can`t manage money or they didn`t start out with any. If genetics made everyone a Buffet, then there would be another system in place to supply basic needs, maybe a law that everyone has to do one day a week on the farm/pipeline/care home? (SF story taking shape here I think) but human nature being what it is there will always be someone willing to exchange their labour for some of the currency of the moment, and always be people who prefer working on the farm rather than anyalising the profit potential of the farm?

I think that there is a bit of Texas Sharpshooter going on here..

If 1000 people try stock market trading, and the market just moves randomly with zero trend, then half will 'beat the market', and 10 of them will be in the top 1%. Bear in mind that humans have a huge propensity to attribute causes to random things.

I'd also add that given that many of our finest minds seem to be dedicated to finding profitable trading strategies, which is a zero-sum game over the medium term, since when one group finds such a strategy, it will affect the market such that other groups learn to take advantage and cancel it out. Digging holes and filling them in for geniuses..

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I think that there is a bit of Texas Sharpshooter going on here..

If 1000 people try stock market trading, and the market just moves randomly with zero trend, then half will 'beat the market', and 10 of them will be in the top 1%. Bear in mind that humans have a huge propensity to attribute causes to random things.

I'd also add that given that many of our finest minds seem to be dedicated to finding profitable trading strategies, which is a zero-sum game over the medium term, since when one group finds such a strategy, it will affect the market such that other groups learn to take advantage and cancel it out. Digging holes and filling them in for geniuses..

clever guys discovered that they can just keep digging courtesy of the Government dump truck

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Today's profits validate yesterday's investment decisions. Today's investment decisions are made in expectation of tomorrow's profits. If yield goes zero or negative then no past or potential investment is profitable and we get a system-wide crash.

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As per title,

As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

There seems little point saving or investing if there is no net yield.

Which yield are you talking about?

For yields to be zero across the curve - then there would have to be zero inflation, zero credit risk and zero duration risk, in all equities and all bonds and all maturities, which would indicate the end of capitalism as we've known it for the last three hundred years or so. Getting interest on savings will be the least of one's problems.

Saving - as in cash - is the act of deferring consumption. Why do you need a yield to do that? You can still defer today's £100 consumption to next year, you just wouldn't be paid for doing so (one could argue if yields are zero, then why should you be paid for doing so).

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Today, due to the internet, there is more opportunity than ever for the "little guy" to take part in the money system and benefit from it than in previous generations, it just seems that the sheeple prefer things simple, "BTL is my pension", "property always goes up" ?

:lol: There's more opportunity than ever to be fleeced in heavily manipulated markets more like.

We live in an era where money has become entirely decoupled from production. It makes little sense to work hard in order to produce a surplus which can be invested in meaningful endeavours when the real gains are being made by people on the inside track who can borrow enormous sums of money at ludicrously low rates to punt into rigged markets designed to extract as much wealth from the unwary as possible.

Edited by Sour Mash

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:lol: There's more opportunity than ever to be fleeced in heavily manipulated markets more like.

We live in an era where money has become entirely decoupled from production. It makes little sense to work hard in order to produce a surplus which can be invested in meaningful endeavours when the real gains are being made by people on the inside track who can borrow enormous sums of money at ludicrously low rates to punt into rigged markets designed to extract as much wealth from the unwary as possible.

The whole premise of the middle and 1% classes is the aim to decouple effort with the money they collect.

It seems we all want to be middle class and BTL is the vehicle of choice...one has to wonder who really benefits?>..I have an idea who it is...and in the long run, its not the people of the UK.

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Which yield are you talking about?

For yields to be zero across the curve - then there would have to be zero inflation, zero credit risk and zero duration risk, in all equities and all bonds and all maturities, which would indicate the end of capitalism as we've known it for the last three hundred years or so. Getting interest on savings will be the least of one's problems.

Saving - as in cash - is the act of deferring consumption. Why do you need a yield to do that? You can still defer today's £100 consumption to next year, you just wouldn't be paid for doing so (one could argue if yields are zero, then why should you be paid for doing so).

Zero inflation or indeed deflation is the only environment that supports zero return. On that basis savings still make sense....look at Japan.

Edited by crashmonitor

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The whole premise of the middle and 1% classes is the aim to decouple effort with the money they collect.

It seems we all want to be middle class and BTL is the vehicle of choice...one has to wonder who really benefits?>..I have an idea who it is...and in the long run, its not the people of the UK.

Everyone's premise should be the best return on effort. i.e. The most money for the least effort. If you can produce excess capital with your labour (helps if you have a valuable specialisation) then with a bit of intelligence and a suitable financial system you should be able to make a decent return on your efforts as well as fund productive investment for others.

When you have a situation where the monetary system is almost totally divorced from productive activity however, it massively incentivises speculation and rentierism from those able to access the abundant central bank liquidity and disincentives actually doing something useful for a living or properly investing your capital.

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As per title,

As money pours into bonds, stocks and property and yield tends toward zero - what will happen?

There seems little point saving or investing if there is no net yield.

Prices set to double every 7 years, guaranteed? Buy now before you miss the boat?

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