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| Want to clarify one thing.
"They" did not "allow" higher interest rates.
The MARKET drove rates & the fed chairmanship change to Volcker simply changed the fed "fantasy rate" to follow the market and GET THE WHOLE MESS CLEANED UP. I have a great deal of respect for him as he dislikes government meddling & dislikes Wall Street games. Thoughout that entire period from the mid-70's to the final blow off...the TBill market led rates. I recall putting excess cash into treasury bills at a 21% investment. As example, a small town banker friend told me "he was just sick about their new policy"-his board of directors (mostly farmers) directed him to shut off local loans and invest in bonds. Just one example.
The cause: the government borrowing crowded out everyone else. Additionally, I was buying bank repos every Friday & resell on Monday to invest excess cash and bank float--it added up ($$$).
Now, I look at negative REAL rates & witness an economy in which we are creating a bigger government payroll, hamburger flippers, census workers and wonder to myself.."what is it really going to take to create jobs?" Occasionally I watch FAST MONEY & listen to these guys roll into quick positions, hedge them off in puts, or calls, or combos & wonder if in the final result they make any money...they do pay a lot of transaction fees. I do know when I check out the bids & offers in some of these markets during the day..there are some big numbers thrown around..lots of speculation...in the past that has always led to some trouble.
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Question for Senior
