On Fri, 20 Sep 2013 18:35:00 -0700 (PDT), "
wrote:

On Friday, September 20, 2013 2:03:12 PM UTC-4, jim wrote:






You make a lot of unsubstantiated assumptions. Bond yields are

low because the demand for bonds is extraordinarily high. Just

because a reporter gives the FED credit doesn't make it so.

Nobody has twisted arms to get people to buy more bonds. The

FED didn't create the demand for low risk assets.




So you are saying that high demand has resulted in lower interest rates?

If that is true, why does a high demand for Gold result in higher prices?

Dan

The interest rate offered on a bond is based on the anticipated
market, or lack thereof, of the bonds. A bond that is issued by an
entity that is perceived as being less reliable will be issued with a
higher interest rate as the risk of ownership is higher and thus
requires more incentive to buyers.

So, if the demand for the bond is expected to be high the interest
payment will be low, and vice versa.
--
Cheers,

John B.