a little exchange from Interest.co.nz

onds = the next bubble

by martyb | 08 Jul 11, 10:24am

What are your

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What are your calculations/reasons for why bonds are the next bubble?

Cheers

by Hamish | 08 Jul 11, 10:44am

I have none. The way I view

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I have none.

The way I view it, is that more and more institutions are scrambling for funding to underpin their business. Banks, businesses, heck even N.Z. is bringing forward cash grabbing just in case they can’t get their hands on enough shortly. So much scrambling for funds going on, to underpin business that is still decelarating from the heady highs of a few years ago. All this fund grabbing in the hope that they will be able to get a return on investment, not only for themselves but to pay back the funders.

Just my hunch though

by martyb | 08 Jul 11, 10:55am

ok – cool . Would I be right

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ok – cool .

Would I be right in saying that you think there wont be enough demand for their businesses in future?

thanks

by steven | 08 Jul 11, 10:56am

It might well cover bonds

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It might well cover bonds somewhere…..but its a cracking read end to end.

Not sure if its Govn Bonds or corporate…..corporate I expect to be messy.

http://www.debtdeflation.com/blogs

by powerdownkiwi | 08 Jul 11, 11:02am New

Reasons – Because economic

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Reasons –

Because economic activity has never divorced itself from physical activity.

Unsurprisingly – after all, money is just a proxy for goods/services.

All of which either happen – or not – using energy.

So – with a side debate about efficiencies, and perhaps the meaning of ‘discretionary’ – the peaking of energy-flow meant the peaking of underwrite-ability.

One presumes bond purchasere expect to purchase more goods and services after their investment, than before.

On average, that can’t be underwritten.

Sure, there will be winners and losers under the sinking lid. Sure, there will be ‘pollies who feed a dumb populace tales of ‘growth’, every time the saw-tooth veers upward, conveniently omitting to relate them to the full gaussian.

Some of the ‘winners’ will be in the renewable energy sector – indeed, it’s hard to see them failing. Others will be in energy efficiency. A new field will be in the triage-managing of the reduction – the inevitable reduction – of oil-based infrastructure.

Having not accepted the reality, most folk still think they can ‘invest’ their way to ‘wealth’, forgetting that this only worked (‘this’ being the underwriting of an exponentially-expanding pile of proxies) on the way up the energy-supply graph.

This ‘unwitting investing’ has to manifest as a series of bubbles – can’t be underwritten thus have to pop. The lemming/herd thing will drive the tendency to one-subject gold-rushes, but; it’s still in trouble as a system even if it diversified.

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See the rest at Interest.co.nz – that’s a HT 🙂  I’m too busy today to blog, too nice outside.  Keep an eye on the ‘Pure Advantage’ website – I’ll write more about them soon.