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Lumifer comments on Financial Effectiveness Repository - Less Wrong Discussion

5 Post author: Gunnar_Zarncke 18 November 2014 09:57AM

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Comment author: Lumifer 18 November 2014 07:39:32PM 2 points [-]

If there's a an annual real interest rate of 10%

Let's get realistic. The current short-term real interest rates in the US are negative.

Comment author: richard_reitz 18 November 2014 10:07:01PM 1 point [-]

Well, if real interest rates are negative, everything reverses, and you should start favoring more expensive things now.

Also, it's possible to be realistic and say things like "if 2 + 2 = 5, then 5 = 2(1+1) and therefore isn't prime".

Comment author: Lumifer 18 November 2014 10:15:49PM 4 points [-]

Well, if real interest rates are negative

At the moment, TIPS (US government securities that pay interest + whatever inflation turns out to be) trade at negative yield for maturities up to five years.

you should start favoring more expensive things

That's the point of monetary stimulus, among other things.