[quote=FormerSanDiegan][quote=earlyretirement]Yep. You can’t keep printing endless supplies of money with NO consequences. It can last for a little while but there WILL be a day of reckoning and you just have to be prepared for it.[/quote]
There will be a day of reckoning. The real quesiotn is how long until that day comes and will it matter to me.
Consider the Japan example…
Suppose you were a bright, intelligent 45-year-old, there when their interest rate dropped below 1%. You know that Japan can’t keep the rate near zero forever, so you start positioning for the eventually consequences.
Rates dropped below 1% in Japan in 1995.
That person that was 45-years old when rates dropped below 1% is still waiting … and they are now age 62. They would have spend nearly the second half of their career in a less than 1% interest rate climate.
SO, while I believe that one should have some hedges against scenarios where rates turn around, inflation runs rampant, one should also be prepared for those things to not happen in a time-scale of their productive lifetime.[/quote]
Exactly right FSD. We live in interesting and difficult to predict times. Absolutely NO ONE knows when that day will come. Lots of experts try to pretend like they know but the truth is no one knows.
The Fed can artificially keep interest rates low for quite a while, further punishing savers and retirees. I mean let’s face it….we’ll probably be stuck in a very low interest rate environment probably until at least 2015.
I guess that’s why you just have to stay well diversified in different “baskets”. But very difficult to predict what will happen and when. Like I said…we live in very interesting times.
