Construction costs are currently skyrocketing

In the chart we see a clear bond crash

In the chart we see absolutely nothing. It doesn’t even have a label. I suspect you yourself don’t really understand what is shown there, or you are welcome to explain it to us...

I stick to my position, we are heading at least into a corridor between 6 and 8 percent.

Then maybe you should consider applying as an economist somewhere and shake up the industry. Because with this opinion – also with the wrong arguments, which I don’t understand either – you stand alone.

Apart from that, by the way, I am currently looking for the continually advancing interest rate rise (just 0.20% more and then staying at the new level is not a rise, but a sideways movement). Oh yes, the experts also point out the missing forecast for rising Treasuries and long-term interest rates (on the contrary: USA: forecast for 10Y Treasuries in 2024 at about 3.70% and easing of interest rate restraints by about 100bp / in Germany, by the way, the yield of 10Y federal bonds will be at about +/- 2.5%, or at most one key rate increase, and a first rate cut in H2 2024).

But well, that’s the job of economists after years of study and professional experience. Of course, they cannot compete with a box tree and its knowledge of the world economy. Or the box tree moth is giving the box tree a hard time ;-)

The chart shows the yields of 10-year US Treasurys over the last 100 years.

The mandate of central banks is clearly defined. Currency stability is the top priority.
Economy, government financing, or consumers come later. Because you often read here and elsewhere that central banks must lower interest rates, otherwise the economy will collapse.

Of course, one has to decide whether the currency or the economy collapses. The mistakes of central banks, especially the ECB,
have not only been made in recent months but go back years.

And the bond crash is not a result of rising interest rates. That is fundamentally wrong. The value of a bond falls or rises depending on market conditions.
For example, if Italy is struggling and has to issue new bonds, the value of Italian bonds does not fall because of interest rate increases. No, the market value falls because investors sell. As a result, interest rates rise.

Declining bonds then lead to central bank interest rate hikes, and demand for government bonds increases due to higher yields. Stocks become less attractive. Rising demand for government bonds leads to increasing bond costs, whose yields then fall. This would subsequently lead to lower financing interest rates.

However, since states and companies have to incur more and more debt, and inflation remains high, the supply of bonds expands significantly, causing prices to fall. Supply and demand.

The construction industry and small homebuyers do not interest the central banks.

I was in Austria recently, and food prices there are already enormous. Not everything, but many things are partly double the price in Germany. There is no sign of inflation containment. When the toll increases here by 83 percent from 12/01, we will see the next wave of price increases here.

Oh dear.

(five words, where one would suffice)

Does Buchsbaum still pose as an economics professor using incoherent Bildzeitung-AFD-Telegram-pub wisdom? I haven’t read him for a long time, but in a time full of upheaval it is at least reassuring to know there is continuity here, even if I cannot see it.

Then maybe you should apply as an economist somewhere and shake up the industry. Because with this opinion you stand alone – even with the wrong arguments, which I don't understand either.

I fully understand your skepticism. But if you listen to the economists of various banks, you can only shake your head. Even Ms. Lagarde has to admit today that she recognized and fought inflation too late. I would have advised her to take much larger and earlier interest rate steps. But as I said, I am a layperson and don't even have a high school diploma.

Dr. Jörg Krämer, my favorite analyst and chief economist of the Commerzbank, was of the following opinion in June 2022.

"At its meeting yesterday, the ECB paved the way for a series of interest rate hikes in view of the high inflation rates. 'We expect the ECB to gradually raise the deposit rate to 1.5% by May 2023.' "

Close but no cigar. By May it was already 3.75 percent and today 4.5 percent.

And even in spring 2022 they did not react to the extreme price increases when wholesale and producer prices were already out of control. They downplayed inflation, tying the interest rate adjustment to inflation expectations. Unfortunately, inflation expectations proved to be significantly too low and pretty much all economists were mistaken.

I prefer to form my own opinion and was actually quite close with it.