The issuer of a security must ensure that its securities are owned by €œqualified institutional buyers (QIBs), which are defined as institutions that have $100 million or more in assets under management Furthermore, the issuer must ensure that at least half of the securities are held by QIBs

https://www.investopedia.com/terms/q/qib.asp

While a pension fund and insurance companies are not QIBs, they are not prohibited from owning the bonds However, if the issuer does not have at least 50% of its bonds owned by QIBs, it risks the downgrade of the bonds by the rating agency

When pension funds buy bonds to rebalance their portfolio yields drop and likewise when they sell bonds yields climb. Falling yields bring in investors buying growth stock chasing profits. Pension funds hold about 125 billion dollars of bonds.

https://www.cnbc.com/amp/2021/03/23/pension-funds-have-to-buy-bonds-to-rebalance-portfolios-and-that-might-be-good-for-stocks.html

WHAT ARE THE BENEFITS OF PENSION FUNDS AND INSURANCE COMPANIES OWNING BONDS?

Pension funds and insurance companies are motivated to take on the risk inherent in bond investments because their clients€™ financial needs are best served by investments that are a stable, reliable, and predictable source of income By investing in bonds, pension funds and insurance companies are able to provide their clients with a predictable stream of income

In addition, pension funds and insurance companies are more able to stomach the risk of bond investments because they typically have a long-term investment horizon, which allows them to weather short-term fluctuations in the value of their investment in bonds Furthermore, because they are non-profit entities, they are not driven to maximize their profits

Pension funds and insurance companies are better positioned than individual investors to purchase bonds that are rated below investment grade This is because these investors are able to purchase these bonds through the pooled investment funds that they manage These pooled investments funds can purchase bonds with ratings that are one or two levels below investment grade because such bonds are typically available at a steep discount Individual investors generally do not have access to such discounted bonds because they lack the access to the pooled investment funds that pension funds and insurance companies have

WHAT ARE THE DRAWBACKS OF PENSION FUNDS AND INSURANCE COMPANIES OWNING BONDS?

Pension funds and insurance companies have to maintain a certain level of liquidity in order to pay their beneficiaries As a result, they typically invest in bonds that mature either in 40 or more years or in fewer than 10 years

Real estate investments are typically illiquid They are often held for a long period of time and are seldom sold This lack of liquidity may make it difficult for pension funds and insurance companies

What if The US government announced a range of initiatives to attempt to reduce the $28 trillion of outstanding debt The most significant of these tactics could be a delay in the payments of $329 billion dollars of interest payments on the debt for the first time in history

https://www.pgpf.org/blog/2022/05/interest-costs-on-the-national-debt-set-to-reach-historic-highs-in-the-next-decade. The yield on the 30-year bonds was 2.96 per cent, which is the highest since January

https://www.cnbc.com/quotes/US30Y

This is the highest level since January, reflecting the continuing concern about the US's financial health

Where populations will grow in the next 100 years

Predicting with lstm long short term memory networks

This question is very subtle

Capitalism is often vilified for being a zero sum game€ The idea is that if someone succeeds, someone else must necessarily fail

This is a gross oversimplification of the way markets actually work

Ironically, it is precisely because of capitalism that we have such a powerful engine of innovation in the first place

The reason why so many of us have so many innovations to choose from is because capitalism is a market system that empowers entrepreneurs

The marketplaces€ of ideas is constantly evolving and improving

Societies that embrace capitalism will have the most powerful engine of human ingenuity, while those that reject capitalism will be left behind

It is true that many innovations are the result of collaboration and thus have multiple innovators

The most successful innovations were the result of many minds working on the problem together

Sometimes, it is a matter of pure luck

But we should not dismiss the role of pure innovation and entrepreneurship in the process

Capitalism is the most empowering system for human ingenuity

MARKETS AND CAPITALISM: WHAT ARE THEY?

We’€™ve been using the words markets€ and capitalism€ interchangeably

However, there is a subtle difference between the two

Markets are everywhere

Even in the most oppressive societies, there are marketplaces, with their own market forces

But capitalism is a very specific type of market system

The most important feature of capitalism is that it is a free market system

Or, in other words, it is a system in which individuals have the freedom to act and to trade with other individuals

In a free market system, property rights are protected, and the government does not interfere arbitrarily

In other words, the government tax people and they do make rules

In a free market system, people are free to choose what they want to produce

There are no restrictions

In a free market system, people are free to help each other by trading

In a free market system, people are free to invent new products and services

At $28 trillion dollars, The US government does not collect enough in taxes to directly pay for its spending with cash on hand, so it must take on debt and sell bonds. Typical buyers of bonds are institutional investors (like pension funds), foreign countries (often sovereign wealth funds or financial institutions serving foreign nationals), and individuals (usually through mutual funds and 401(k) accounts).

If the government defaults or comes close to defaulting, credit rating agencies would likely downgrade the rating of Treasury bonds. In 2011, the mere threat of default prompted the credit rating agency Standard & Poor’s to downgrade the United States from its AAA rating to AA+ for the first time in 70 years.

Default would mean the cost of borrowing for the US government would increase, perhaps dramatically. And when its more expensive for the government to borrow, it will be more expensive for individuals to borrow.

For every 1% decrease in GDP growth, there is roughly an 0.5% increase in the unemployment rate, according to an economic concept known as Okun’s Law. 

A recent report from Moody’s has an even more calamitous prediction, forecasting that just a short-term debt default could lead to a 27% drop in the stock market

China has $1.05 trillion and Japan has $1.30 trillion of US Treasury securities in reserves

https://www.thirdway.org/report/the-dominoes-of-default-in-2021

The government-controlled bank has been selling dollars in the foreign exchange markets to stem the yuan€™s rise and prevent it from falling too fast But the yuan kept rising, stoking a rally in global stocks and commodities that helped inflate bubbles in emerging markets

China said it would allow the currency to trade more freely

The yuan rose 0 1 percent to 6 2295 per dollar as of 4:16 p m in Shanghai, after gaining as much as 0 3 percent The currency has appreciated 1 3 percent so far this year

The PBOC said the one-way appreciation of the yuan was not sustainable€ and that it wanted to break the trends€ of increasing volatility

The PBOC said it would fine-tune the yuans value

The PBOC said it would strengthen its operations in the spot foreign-exchange market to keep the renminbi exchange rate stable around the equilibrium level, according to a statement on its website

WHAT WOULD THE PBOC NEED TO DO TO WEAKEN THE YUAN?

The PBOC would need to buy a lot of dollars to weaken the yuan, meaning it would have to provide dollars to the market, which it has so far not been doing Such a move would almost certainly curb the rally in commodities, equities and emerging markets

The PBOC said it would strengthen the management of the renminbi exchange rate,€ a hint it could now buy dollars to lower the yuans value

HOW HAS THE YUAN BEEN STABLE?

China€™s currency has been relatively stable over the past few months as the PBOC has been selling dollars to keep the yuan from weakening too much

The yuan has been trading at a narrow range of about 0 1 percent around the central bank€™s daily reference rate, which is set every morning

The PBOC has been allowing the yuan to appreciate, but at a much slower pace than the market expected

The Rayney catalyst causes the atomic hydrogen to drop to a lower energy level forming a hydrino. The net energy released my be 100 times the energy of fossil fuel. Water as fuel. The technology is being applied to heating and electricity production.

In Dec 2008, Black light power licensed Estacado too produce gross thermal power up to a maximum continuous capacity of 250 MW or convert this thermal power to corresponding electricity

Jan 2009, Black light power licensed Electric Cooperative, Inc. of New Mexico, to use Blacklight power for the production of thermal or electric power up to a maximum continuous capacity of 250 MW or convert this termal power to corresponding electricity

Blacklight power completed a “successful independent replication and validation of its 1,000 watt and 50,000 watt reactors based on its proprietary new clean energy technology.”

On October 20, 2008, BLPI made a statement that Peter Jansson of Rowan University had completed a three month test of their reactors and validated excess heat production. (Reference Link)

August 12, 2009: BLP press release through Hill & Knowlton claims that researchers at Rowan University reproduced BlackLight process, using their own materials. Results were claimed to show 1.2 times to 6.5 times the energy released than can be attributed by known chemical reactions

Dr Rand Mill says, "The BlackLight Process generates more than 200 times the energy of burning hydrogen that can be harnessed to replace the thermal power in coal, oil, gas and nuclear power plants. These experimental results prove that the new power source discovered in our labs has the possibility to make a profound impact in our current energy-strapped economy"

Quote BlackLight intends to rely on existing technologies to convert thermal power to electric power. As BlackLight devices generate surface heat at grades comparable to existing commercial fire boxes in natural gas and coal-fired plants, existing heat-to-electric technologies such as gas turbine, micro-turbine and Sterling engines can be melded with BlackLight power cells to generate electricity, as well as space and process heat. end Quote

BlackLight Power

Fact: 1. Dr. Randall Mills, Blacklight catalyst causes hydrogen to take on a fractional quantum state far small than ground state, less than Bohr’s radius. The catalyst is called Rayney forming a Casmir geometry. The hydrinos produce 200 times more energy from the fractional quantum state.

2. Jon Naudts proposed hydrogen atoms inside a Casmir cavity could appear to have fractional states. Naudts said the relativistic state could appear fractional. The Casmir cavity is where local vacuum fluctuations are depleted.

3. In 2007, Ron Bourgoin published an article, “Inverse Quantum Mechanics of the Hydrogen Atom” showing the general wave equation (QED) predicts exactly the 137 fractional states claimed by Dr. Randall Mills

4. Classical quantum mechanics states hydrogen in a free space exits at the minimal ground state.

This is where it gets interesting If you own a bond, you are lending money to a company or a government While the company or government pays you a fixed interest rate in exchange for your loan, the interest rate on bonds is fixed and the bond holder receives the interest payments at specific times If the interest rate on bonds rises, the price of the bonds must adjust to compensate for the higher interest rates, resulting in a lower price for the bond The reason for this is that if you bought a bond at a lower price, the next payment will be worth more in dollar terms

The opposite is true when the interest rate on bonds falls If the interest rate on bonds falls, the bond price must increase to compensate for the lower interest rate, resulting in a higher price for the bond

This is a very simple example of how interest rates affect the price of bonds and how interest rates affect the price of bonds affects the price of stocks

The same is true when it comes to the stock market If the interest rate on bonds rises, the price of stocks must adjust to compensate for higher interest rates, resulting in a lower price for the stock The opposite is true when interest rates fall

This is why the Federal Reserve and the behavior of the bond market plays such a large role in determining the overall health of the stock market

Most people don't have the time or skill to look at dozens of different stocks and have the knowledge to know what they are doing So they should just buy an index fund

The average person doesn't have a lot of stock choices It's not like they can make high risk bets on Asian stocks or European stocks

Also, the average person doesn't really have the time to research stocks I mean you can do it but unless you are an investor of some sort for a living or you have nothing else to do but read about stocks then you probably don't have the time to do it

So I'm going to be honest here I think the average person should just buy an index fund

The average person doesn't have the time or knowledge to choose stocks

The same goes for gold and other precious metals The average person should just buy an index fund

It should be noted that I'm not saying the average person should never buy individual stocks or gold I'm saying that most of the time for most people it's better to invest in an index fund

A lot of people say that you shouldn't invest in stocks because the stock market is a gamble

They say that there is no way to know what the market is going to do in the future

And that is true; the stock market is a gamble

But that's why you shouldn't invest in stocks

The stock market is a gamble, so you shouldn't invest in it

It's a gamble

So what do you do?

You don't gamble

You invest in things that are not a gamble

And investments that are not a gamble are things like bonds, CDs, and index funds