Click to enlarge.
Four exponential trend lines and their growth rates have been added.
Note that each time an exponential trend fails, it is replaced with an exponential trend of lesser quality. What doesn't kill us, doesn't make us stronger. Go figure.
The next chart shows the long-term trend of those growth rates. I'm using the midpoint of my hand-picked expansions as the x-axis.
Click to enlarge.
The most recent data point is open to serious revision. The growth rate probably won't change much, but the x-axis position may (it could move to the right on the chart). It really comes down to how long this expansion lasts.
Real yields have fallen because real GDP growth has fallen (and continues to fall). It really is just that simple. Put another way, it is becoming harder and harder to make money off of money (current lofty stock market valuations notwithstanding).
Those hoping for a return to normal better hope that the downward trend does not continue, because that's about the only normal thing going on right now.
The future's so bright I gotta werewolves.
See Also:
The Long-Term Death of Real Yields
Source Data:
St. Louis Fed: Real GDP
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