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3#
发表于 2013-4-8 12:11
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economic expansion–high inflation–interest rate rise–bond price drops.
May be this way you understand.
Why inflation is high (in general) : Economy expanding (may be due to govt stimulus, less taxes, more disposable income in the hands of general public). Everyone has money then. Too much money chasing the available goods. Prices go up. Inflation Goes up.
If someone, at that point, asks you to defer your current purchase of say HomeTheatre System which costs today @ $1000. Seeing all prices going up, you also think the HT will cost next year say $1100 which is 10% more. Now if anyone tells you to defer your purchase and gives you 5% (next year you will get 1050) you will say NO. You will atleast ask for 10% based on the present view you have on inflation. Say after 10days you expect inflation woulb be 20% by next year. Now you will atleast expect 20% as compensation to defer your purchase and lend money.
Am I right ? If there is any disconnect please clarify. |
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