Question (Maybe someone with knowledge can help me as a noob to understand it):
The FED buys for 1$ a bond that is worth 0.9$ because of the higher interest rate.
Why do interest rates on Bonds still exist? .... Makes no sense anymore.
This leads to everyone buying the long end with very low interest rate, exchanges it with the FED for 1$. This comes close to yield curve control / flatening the curve.
This can in turn be unlimited leveraged till the yieldcurve is adjusted.
When everything is flat time has no value anymore, when time has no value why even work for it anymore?
I think with the current action the FED completely destroyed the global bond market.... And there is no way to fix it anymore except letting banks fail.
The second problem is FDIC holds 23B USD , the FED holds 230B TBills ... that isnt even enough to cover 0.1% of the eurodollar bond yields.... ehm. jeah.
Push it further....
30y home mortgage are now worth much much more because you can exchange it again for 1$ for every borrowed $. wouldnt that decrease the home value directly at least 10% down?
Would love some input... i realy try to understand it.
snapo /
npub1tv…nx3zg
2023-03-14 03:05:32
Author Public Key
npub1tvuqquww07r75lju3el6g2u0gvlls078k0uegr6st6hmelw7fztsxnx3zgPublished at
2023-03-14 03:05:32Event JSON
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"content": "Question (Maybe someone with knowledge can help me as a noob to understand it):\n\nThe FED buys for 1$ a bond that is worth 0.9$ because of the higher interest rate.\nWhy do interest rates on Bonds still exist? .... Makes no sense anymore.\nThis leads to everyone buying the long end with very low interest rate, exchanges it with the FED for 1$. This comes close to yield curve control / flatening the curve.\nThis can in turn be unlimited leveraged till the yieldcurve is adjusted.\nWhen everything is flat time has no value anymore, when time has no value why even work for it anymore? \nI think with the current action the FED completely destroyed the global bond market.... And there is no way to fix it anymore except letting banks fail.\nThe second problem is FDIC holds 23B USD , the FED holds 230B TBills ... that isnt even enough to cover 0.1% of the eurodollar bond yields.... ehm. jeah.\nPush it further....\n30y home mortgage are now worth much much more because you can exchange it again for 1$ for every borrowed $. wouldnt that decrease the home value directly at least 10% down?\n\n\nWould love some input... i realy try to understand it. ",
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