Rates and Economic Decline?

Over at a financial forum...

Baron - "Just another thing I don't understand, how can 20 year rates keep going down if the economy is doing better,"

When all other possibilities have been eliminated, what remains must be the truth. 

A good rule, never conflate interest rates with the price of money. The price of money is reflected in FX and price indices. Strong currency, strong economy? and vice versa? Not always so.

Specific to the question at hand... Interest rates are NOT the price of money, they are the price of loan funds. When economic activity rises, demand for loan funds rises, so does the price in the form of interest rates. 

What banker does not raise rates as demand rises? This would be the bane of their existence. When economic activity declines, demand for loan funds fall, and so does the price or interest rates. 

Mushroom management is openly practiced by the Fed and MSM viz. keep em in the dark and feed em a bunch of shit, aka pabulum for the masses. 

The resulting construct includes a healthy dose of falsity in econometrics, fostered by monetary and economic policy based in false doctrine, all intended to "firmly anchor expectations".  

If one believes, which many Jonathan Gullible's or suckers do,  then the illusion has served its purpose. 

Diametrically opposed to artificial and false constructs, the bond and eurodollar market tell the truth, the whole truth and nothing but the truth.  That being, lower rates, viz. lower cost of loan funds means, slower growth in economic activity and demand.  

Translated, the global economy is not doing well and future growth expectations are worsening.  Nothing more, nothing less.  Simple, if you know what money is.

More to come in What Is Money?