Monday, January 12, 2015
A hint, this will look expensive soon.
With oil hitting the $46 handle today, 2yr bonds falling below 0.4% the stars are aligning now for negative interest rates creating government surpluses, combined with weak growth (due to low investment), leading to the next big trend. TAX CUTS. Like, 75% of fuel costs are now tax. With stimulus opportunities disappearing by the minute this will become the new trendy way to boost the economy, because the fundamental reason for weakness is higher taxes and regulations. We may also finally see a backlash against regulations as corporations discover that subsidies, bailouts, etc. just are not working any more.