When I suggested in a "starvation wages" sub thread, which
posited companies don't pay taxes, they just pass these
along to the customer, that in [too] many cases the major
corporations now depend on subsidies and tax preferences for
most of their "profit", several people expressed doubts.

You may find the following of interest. 700 billion has
been hijacked from the makers and savers and given to the
corporate "takers" by just the FRB. The technical term for
this is "financial repression."

http://www.bloomberg.com/news/2013-0...on-borrow.html
snip
America’s companies, from Apple Inc. (AAPL) to Verizon
Communications Inc., are saving about $700 billion in
interest payments with the Federal Reserve’s unprecedented
stimulus.

Corporate bond yields over the past four years have fallen
to an average of 4.6 percent from 6.14 percent in the five
years before Lehman Brothers Holdings Inc.’s demise, a
savings equal to $15.4 million annually per every $1 billion
borrowed.
snip

What in the way of *DOMESTIC* investment, job creation, and
increased tax base has resulted? Wall Street is not Main
Street, and the "market" is not the American economy.

"F. George McDuffee" wrote:

When I suggested in a "starvation wages" sub thread, which
posited companies don't pay taxes, they just pass these
along to the customer, that in [too] many cases the major
corporations now depend on subsidies and tax preferences for
most of their "profit", several people expressed doubts.

You may find the following of interest. 700 billion has
been hijacked from the makers and savers and given to the
corporate "takers" by just the FRB. The technical term for
this is "financial repression."

http://www.bloomberg.com/news/2013-0...on-borrow.html
snip
America’s companies, from Apple Inc. (AAPL) to Verizon
Communications Inc., are saving about $700 billion in
interest payments with the Federal Reserve’s unprecedented
stimulus.

Corporate bond yields over the past four years have fallen
to an average of 4.6 percent from 6.14 percent in the five
years before Lehman Brothers Holdings Inc.’s demise, a
savings equal to $15.4 million annually per every $1 billion
borrowed.
snip

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.


What in the way of *DOMESTIC* investment, job creation, and
increased tax base has resulted? Wall Street is not Main
Street, and the "market" is not the American economy.

What sort of job creation and investment do you expect?
Businesses do those things when they forecast the increased
output can be sold. When they have no expectation of more
sales they hang on to the money. But what is that "money"
that the corporations are hanging on to?

Do you think large corporations hold bundles of Ben Franklin's or
large savings accounts at the bank. The "money" they are holding
for the most part is bonds.

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

On 2013-09-21, 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?


The interest rate is the opposite (inverse) of price, when we talk
about bonds. The lower the interest rate, the higher the price of
bonds.

For example, to simplify, a bond that promises to pay $100 in a year,
would cost $91 if the interest rate is 10%, and $99 if the interest
rate is 1%. The 1% bond is higher priced.

i

On Friday, September 20, 2013 11:56:40 PM UTC-4, Ignoramus3517 wrote:

The interest rate is the opposite (inverse) of price, when we talk

about bonds. The lower the interest rate, the higher the price of

bonds.



For example, to simplify, a bond that promises to pay $100 in a year,

would cost $91 if the interest rate is 10%, and $99 if the interest

rate is 1%. The 1% bond is higher priced.



i

You are right, I do not know what I was thinking, or rather not thinking. I really know better.

Dan

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.