People Buy Payments (Or Why Rates Can’t Rise)

By Tyler Durden

Authored by Lance Roberts via RealInvestmentAdvice.com,

This past week, the lovely, and talented, Danielle DiMartino-Booth and I shared a discussion on the ongoing debate of why “Rates Must Rise.”

Debt drives rates lower….not higher. Debt is deflationary. See chart below and read this: https://t.co/jHAcnuGTit pic.twitter.com/tM2a5BrIiO

— Lance Roberts (@LanceRoberts) July 14, 2017

I know..yes…the piper will be paid but in the worst possible way….you are talking about a major dislocation resulting in deleveraging.

— Lance Roberts (@LanceRoberts) July 14, 2017

For the last several years, I have produced a litany of commentary (see this, this and this) on why rates WILL not rise anytime soon, they CAN’T rise because of the relationship between debt and economic activity.

Most of the arguments behind the “rates must rise” scenario are based solely on the premise that since “rates are so low,” they must now go up. This theory certainly applies to the stock market which is driven as much by human emotion, as fundamentals. However, rates are an entirely different animal.

Let me explain my position using housing as an example. Housing is something everyone can understand and relate to, but …read more

Source:: ZeroHedge