[quote=FlyerInHi]What makes you think that today’s rates are artificially low? What is artificial and real?
Money is just a human created means of exchange in commerce. There’s should be no reason for money to automatically make money on money, such as when rates are high.
Maybe we are just smarter in managing the money supply?[/quote]
Rates are artificially low because they are 100% driven by the Fed and not the free market. 95% of all mortgages originated today are Gov’t backed. This is far higher % than this has been in most of U.S. history. Do you really think if the mortgage market were more balanced with private investors that these private investors would take the risk for 3.5% return on a 30 yr fixed mortgage? The only reason rates are at 3.5% is because the Fed (aka tax payers) is guaranteeing 95% of all mortgages, and billions in Mortgage Backed Securities were purchased with Gov’t printed QE money helping to keep rates down.
It doesn’t seem healthy to me that the world economy is driven more and more by central Fed planning, rate manipulation, money printing, and more & more debt vs. true fundamentals, rising incomes, and good jobs.
I’m not smart enough to know how this all works out. Maybe it all works out and fixes itself. But there is no doubt we are in uncharted waters with this global monetary policy experiment that has been going on the past 8 years.
