Re: moore on term structure

[Warren Mosler <mosler@xxxxxxxx>]

Doug Henwood wrote:
>
> Warren Mosler wrote:
>
> >So the buyer(s)/seller(s) who are that
> >market are expressing their expectations of 3 mos rates whether they
> >know it or not.
>
> Seems to me they're expressing their guess about what long rates will be
> the day after tomorrow - in Keynes's phrase, anticipating what common
> opinion will be, or, even more wonderfully, aping unreason proleptically.

Sure, the greater fool theory, etc.  But they are still trading
thirty years of rate expectations with each other.  Just like
equity traders are trading present values of future payments with
each other.  The fact that you buy something only hoping to sell it
at a higher price doesn't alter the thing you are buying?

I am not addressing the motivation of the traders, but identifying that
which they are trading.

Warren

>
> Doug

--
Warren B. Mosler
Director of Economic Analysis
III Finance

See:

"Soft Currency Economics"
"Full Employment AND Price Stability"
=========================
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