Tuesday, December 29, 2015

Michael Bury, The Trader Who Shorted the Securities Mortgage Market, Says We Are Heading Toward Negative Interest Rates

Micahel Bury, who is the trader upon which the movie The Big Short is based, tells New York Magazine:
 It seems the world is headed toward negative real interest rates on a global scale. 
Not a chance in the US. We are at the early stage of a multi-year climb in rates,


UPDATE: Commenter Luke correctly points out that Bury said "negative REAL rates, "which is a different story than negative rates, So I will remove Bury from that camp. We do currently have negative real rates and while I expect rates to climb for the foreseeable future I expect the REAL rate to stay negative for the  foreseeable future.


  1. "Negative REAL rates" he said. Not negative interest rates.

  2. Yay! Continued capital consumption. See https://mises.org/library/human-action-0/html/pp/806

  3. What's he talking about? We've been in negative real interest rates for quite a while.

  4. Rates above 1%-2% will rupture multiple huge asset bubbles. Mere lack of continued money printing will see bubbles start to deflate. The Fed will not stand by and take the pain of either of these scenarios.

    By contrast, negative rates, i.e. tax on cash, coupled with more money printing keeps all the bubbles inflating. That is most attractive path for the Fed, just as it was for the ECB.