Image liquidating

A business will always seek to borrow at lower than its return on capital (or else there’s no point).

Though even in positive-rates America, they can get away with it for a long time if the Fed creates a permissive credit environment. Time itself (we will revisit this idea in a future essay).As an aside, this is a good way to think of the dynamics of a falling interest rate.There is little demand for credit, other than on a downtick in interest rates.Further to our ongoing theme of capital destruction, let’s look at a topic which is currently out of favor in the present market correction. Despite the current global uptick in rates, all Swiss government bonds out to 8-year maturity have a negative yield.Keynes called for pushing the interest rate down near to zero, as a way of killing the savers, whom be believed are functionless parasites. Hey, at least that’s a recovery from when the 20-year had a negative yield.

Search for image liquidating:

image liquidating-84image liquidating-65image liquidating-78image liquidating-12

However, Fed or no Fed, losses are written on the financial statements. When interest sinks below zero, it means that the return to be earned on capital is negative.

Leave a Reply

Your email address will not be published. Required fields are marked *

One thought on “image liquidating”