While he was stunned by the currently high long-term Treasury bond rates, Carter also had a clearer understanding of what he had done at Douglas...

In the news, we often hear that a certain country's central bank raised interest rates by a certain number of basis points in order to curb inflation; or that in order to stimulate the economy and resist deflation, it lowered interest rates by a certain number of basis points...

The numbers you hear normally are interest rate increases/decreases of 50, 100, 150... If you can increase/decrease interest rates to 350 basis points, it is already a very big move! And one basis point represents only 0.01%, which means that even if the volatility is 350

basis points, converted into a percentage, it is only 3.5%.

But what about myself now?

The interest rate cut is at least six to seven hundred basis points!

In the past, Carter only thought that the area here was small and the foundation was weak, so the results would be quick with a little effort. Looking back now...

Just like the theory of canyon relativity, there is also a theory of relativity in economics. When the prevailing interest rate was 15%, if you set 12%, it would be equivalent to a 300-point interest rate cut; if you don't move and others raise interest rates, doesn't that mean you are cutting interest rates?!

The harsher the outside world imposes, the more we let go...

The business here...

"That's not right! Goodman, since the interest rate on national debt has become like this, then our interest rate is actually...Aren't there people who want to do business come to us for loans?"

"There is another question...Who is paying for these additional issuances of national debt? Where does the money come from?"

When there is no large amount of additional currency issuance, the existing total amount of money in circulation can probably be regarded as a fixed number. Now generally there is less money circulating in the stock market and the bond market, so who exactly pays for the government bonds?

!

Are there many people in the United States who have the money to buy this?!

"Business... When the business is big, we can't lend that much money... When the business is small... Do small businessmen dare to start a business and do business in this era?"

Goodman shook his head without tears. Just when he was about to continue saying something, Carter suddenly slapped his thigh again:

"It's over! The national debt interest rate has reached 15.82%. How can I sell my 12% mortgage?"

“I was just thinking, since housing loans can be packaged into pass-through securities for public financing, then why don’t I also package commercial loans to some large companies with good credit into bonds and list them in the secondary market for financing? Use the financing amount

Come and lend money... Now think about it, well, to attract them, we must have low interest rates, but loans with low interest rates cannot be sold at all, and we cannot raise funds..."

"Now it's a question of whether I can still sell 10 million yuan..."

Carter originally wanted to complain about why Julian didn't remind him two days ago and actually gave himself such an optimistic valuation. But then he thought about it, can he blame others for this?!

He himself said that he doesn’t pay attention to the bond market. It is just a reference based on suggestions based on experience. Based on Julian’s growth experience, he is a person who has lived in an era of low interest rates all year round! Instinctively, he uses low interest rates.

Considering the situation of the period, there is nothing wrong with it...

"The annualized interest rate of 12% is not bad...the ten-year government bond interest rate is not that high every time! Look at this quotation, the peak appears around September 30, and it is already a bit uncomfortable after entering October.

Stable, swinging back and forth between 14% and 15%

. Now it has entered the 13% range in November, and it has reached 13.14% in the period on the 20th. According to this trend... the 13% range has been swinging for a while, and by December, or January next year, it should fall to 12

% interval..."

Goodman was the earliest insider of Carter's plan to securitize mortgages. If not, he would not have collected such detailed bond market information:

"For now, as long as you are conservative and don't start new projects, you are not in a hurry to use the money. Be patient and enjoy your campus life first..."

"Well, that's what I say, but even if we don't talk about the problem of thousands of people being unemployed before the end of next year, we just see the opportunity, but we can't move..."

"There are many people who attack violently, but there are very few people who are patient enough! If you want to defeat the market, you must learn to restrain your instincts..."

"Okay, okay, let's leave this question aside for now. Another question, where do you think the funds come from to buy these national debts?"

After giving a wry smile, Carter put aside the topic for the time being and turned to think about another question...

"Part of it is domestic, and part of it is international... It's mainly international funds, especially from Latin America in the south. Recently, there has been a significant increase in people from Costa Rica, Honduras and other Central American countries entering from Florida..."

"After the U.S. dollar is decoupled from gold, there will be no limit on the issuance. In the past, a large amount of additional currency was issued, which caused the value of the domestic currency to fall and inflation to rise. What do you think you will do? Oh, by the way, there is also a loan interest rate.

Low, that is, low financing costs..."

"You mean, use money to invest in foreign countries, such as Central and South America, Asia, Africa, etc.? It should be Central and South America..."

The value of the United States at home has decreased, but it can be obtained from these Central and South American countries, and the value is not low! Coupled with the decrease in financing costs, going to these places...

Asia, Carter thought about it and dismissed it from his mind. Before a large amount of foreign capital entered China, due to the strategic goal of guarding against the Soviet Union in the early years, capital from Japan, South Korea, the Philippines, and the United States had almost entered. There were four little dragons, four little tigers, etc.

...Now the salary standard of Japanese workers is higher than that of American workers!

Asia is obviously not a good investment direction, and Africa...

On the one hand, that place is far away, and on the other hand, the French power in Africa is stronger than that of the United States. Compared with Africa, which is slightly unfamiliar, Latin America, the poor neighbor of the United States, should be more attractive to most American investors.

!

"Then due to the currency depreciation caused by high inflation, the exchange rate of the U.S. dollar against the peso should be less and less. That is, the depreciation of the U.S. dollar is equivalent to the appreciation of the peso in disguise... Invest in the Central and South American markets when the U.S. dollar is valuable, and wait until later.

..”

"Now the determination of the Federal Reserve to curb inflation is obvious, and the two governments also support it. Moreover, the interest rate on government bonds is rising... which has led to the return of those funds! It is the government bonds that were bought with this money!"

"That should be the case. If you want to confirm, you can look at the national debt situation of Mexico, Costa Rica and other countries. I remember back in the mid-1960s, investment in Central and South America was a craze. A large amount of hot money poured in, and

The legal currencies of these countries have low international credibility, and the bonds they issue should also be US dollar bonds..."

"If funds from Latin America return to the United States at this time, then in addition to the economic depression, there should also be problems with debt repayment. At least, the repayment speed will slow down. This should be inevitable."

One hand treasury bonds, one hand U.S. dollars...

When the domestic economic situation is good, it lowers interest rates and spreads money all over the world. Once the domestic situation worsens, it increases the interest rate on national debt and quickly withdraws dollars from the world...

Among the withdrawn dollars, do you think there will be profits from the exploitation of these dollars in the places where they were invested?

And looking at it from another perspective, aren’t these profits the wealth of the investee country?
Chapter completed!