“Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.”
heheheh –
I can beat that… back in 2004 I was expecting rates to be in the 8% range by 2006. I gave up long long ago trying to justify that things have to happen.
JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.
In reality, nothing HAS to happen, yes things can/will eventually snap under the burden of debt. However to doubt the will of the powers that be to use EVERY tool at thier disposal to continue to keep the consumer buying is something that I stopped trying to do. I am amazed at the tenacity of these same powers that be. They have proven time and time again that they will continue with every ounce of energy to prop things up and let the reins out until they run out of leather.
We have already given the screw you signal to foreign investors who lost billions in MBS. Can and will we do the same for treasuries? I would think no we won’t but… well I think there is a big but there. For all of the problems it would cause us there are big problems that it would cause our creditors as well if they said, screw you USA.
Can all this keep a low treasury yield forever? No way jose…Again, I do indeed agree with your line of thought. Just not as sure of the time frame as you are. I do think Ben will adjust them if he can get a couple months of stable economic numbers. I don’t see him cranking them like he should but he will most likely nudge them.
Also we will be alot healthier financially to suck it up and raise the rates… Can’t help but wonder where rates would be if Volker was running the show right now.
