5min chapter

The Macro Trading Floor cover image

Debt, Demographics & Deflation Ahead | Raoul Pal

The Macro Trading Floor

CHAPTER

Is There a Need for Negative Real Rates?

Raul Reyes says negative real rates will prove to be the most politically palatable way to indirectly grow ourselves out of the current debt load. As soon as you enter a zero in a discount cash flow model, basically forever in the model, you can convince yourself of everything," he said. He added that anything that is discounting with negative real rates or a zero nominal interest rate for that sake seems like a good long term investment when you discount that and cash flows far in the future discounted at zero interest rates.

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