Re:How This Ends
by MR4D on Monday May 23, 2022 @12:46PM
(#31481419)
A 10% rate on a 30-year treasury, is for all intents, permanent.
Think of it this way - a person buys a 30-year bond yielding 10%. Then, for the next 30 years, no matter what happens to interest rates or prices, they will earn a 10% return on their original bond purchase, risk free.
Remember also that 30 years is approximately your adult working life, so a really long time that people tend to think of a “permanent”.
Is it truly permanent? No, but for purposes of discussion and financial planning, it’s close enough.
Think of it this way - a person buys a 30-year bond yielding 10%. Then, for the next 30 years, no matter what happens to interest rates or prices, they will earn a 10% return on their original bond purchase, risk free.
Remember also that 30 years is approximately your adult working life, so a really long time that people tend to think of a “permanent”.
Is it truly permanent? No, but for purposes of discussion and financial planning, it’s close enough.