Do interest rates worry you?

[JWM in SD]

“Inflation is the opposite of recession btw.”

No, inflation is an expansion of the monetary base or money supply. Higher interest rates reflect the need for risk and future payment in equivalent basline amounts. The two are mutually exclusive as far as I’m concerned. Recession just means that there is slowed economic growth or negative growth in real terms. If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??

[jficquette]

Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.

My guess is that at some point Social Security will become means tested and that the government is committed to keeping asset values as high as possible. This means low rates to keep the 401k’s up and to mitigate the lost of housing values as much as possible.

Keeping 401k’s up will allow more people to be means tested off the rolls.

I have come to the belief that the government will do anything even tolerate inflation to keep the stock market up as high as possible.

The next bubble is (will be) the stock market.

John

[jficquette]

Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.

My guess is that at some point Social Security will become means tested and that the government is committed to keeping asset values as high as possible. This means low rates to keep the 401k’s up and to mitigate the lost of housing values as much as possible.

Keeping 401k’s up will allow more people to be means tested off the rolls.

I have come to the belief that the government will do anything even tolerate inflation to keep the stock market up as high as possible.

The next bubble is (will be) the stock market.

John

[jficquette]

Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.

My guess is that at some point Social Security will become means tested and that the government is committed to keeping asset values as high as possible. This means low rates to keep the 401k’s up and to mitigate the lost of housing values as much as possible.

Keeping 401k’s up will allow more people to be means tested off the rolls.

I have come to the belief that the government will do anything even tolerate inflation to keep the stock market up as high as possible.

The next bubble is (will be) the stock market.

John

[jficquette]

Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.

My guess is that at some point Social Security will become means tested and that the government is committed to keeping asset values as high as possible. This means low rates to keep the 401k’s up and to mitigate the lost of housing values as much as possible.

Keeping 401k’s up will allow more people to be means tested off the rolls.

I have come to the belief that the government will do anything even tolerate inflation to keep the stock market up as high as possible.

The next bubble is (will be) the stock market.

John

[jficquette]

Back in 2006 I was expecting 30 years fixed to be around 8% by now. Obviously I was wrong.

My guess is that at some point Social Security will become means tested and that the government is committed to keeping asset values as high as possible. This means low rates to keep the 401k’s up and to mitigate the lost of housing values as much as possible.

Keeping 401k’s up will allow more people to be means tested off the rolls.

I have come to the belief that the government will do anything even tolerate inflation to keep the stock market up as high as possible.

The next bubble is (will be) the stock market.

John

[an]

If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Here’s your answer: http://en.wikipedia.org/wiki/Stagflation

Since you haven’t provided data to prove that the bond market and the fed raising rates in the face of recession/depression, here’s a couple of links for you to chew on:
http://en.wikipedia.org/wiki/Recessions
http://en.wikipedia.org/wiki/Federal_funds_rate

Based on government data, we have the follow recession in the past:
* January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
* July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

* July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
* March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

The Fed responded with these:

* July 13, 1990-September 4, 1992: 8.00% to 3.00% (Includes 1990-1991 recession) rate drop chart rate rise chart
* February 1, 1995-November 17, 1998: 6.00 – 4.75 rate drop chart1 rate drop chart2 rate rise chart
* May 16, 2000-June 25, 2003: 6.50- 1.00 (Includes 2001 recession) rate drop chart1 rate drop chart2 rate rise chart
* June 29, 2006- (Mar. 18 2008): 5.25-2.25 rate drop chart

I guess Wiki and history doesn’t know what they’re talking about either.

[an]

If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Here’s your answer: http://en.wikipedia.org/wiki/Stagflation

Since you haven’t provided data to prove that the bond market and the fed raising rates in the face of recession/depression, here’s a couple of links for you to chew on:
http://en.wikipedia.org/wiki/Recessions
http://en.wikipedia.org/wiki/Federal_funds_rate

Based on government data, we have the follow recession in the past:
* January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
* July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

* July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
* March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

The Fed responded with these:

* July 13, 1990-September 4, 1992: 8.00% to 3.00% (Includes 1990-1991 recession) rate drop chart rate rise chart
* February 1, 1995-November 17, 1998: 6.00 – 4.75 rate drop chart1 rate drop chart2 rate rise chart
* May 16, 2000-June 25, 2003: 6.50- 1.00 (Includes 2001 recession) rate drop chart1 rate drop chart2 rate rise chart
* June 29, 2006- (Mar. 18 2008): 5.25-2.25 rate drop chart

I guess Wiki and history doesn’t know what they’re talking about either.

[an]

If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Here’s your answer: http://en.wikipedia.org/wiki/Stagflation

Since you haven’t provided data to prove that the bond market and the fed raising rates in the face of recession/depression, here’s a couple of links for you to chew on:
http://en.wikipedia.org/wiki/Recessions
http://en.wikipedia.org/wiki/Federal_funds_rate

Based on government data, we have the follow recession in the past:
* January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
* July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

* July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
* March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

The Fed responded with these:

* July 13, 1990-September 4, 1992: 8.00% to 3.00% (Includes 1990-1991 recession) rate drop chart rate rise chart
* February 1, 1995-November 17, 1998: 6.00 – 4.75 rate drop chart1 rate drop chart2 rate rise chart
* May 16, 2000-June 25, 2003: 6.50- 1.00 (Includes 2001 recession) rate drop chart1 rate drop chart2 rate rise chart
* June 29, 2006- (Mar. 18 2008): 5.25-2.25 rate drop chart

I guess Wiki and history doesn’t know what they’re talking about either.

[an]

If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Here’s your answer: http://en.wikipedia.org/wiki/Stagflation

Since you haven’t provided data to prove that the bond market and the fed raising rates in the face of recession/depression, here’s a couple of links for you to chew on:
http://en.wikipedia.org/wiki/Recessions
http://en.wikipedia.org/wiki/Federal_funds_rate

Based on government data, we have the follow recession in the past:
* January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
* July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

* July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
* March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

The Fed responded with these:

* July 13, 1990-September 4, 1992: 8.00% to 3.00% (Includes 1990-1991 recession) rate drop chart rate rise chart
* February 1, 1995-November 17, 1998: 6.00 – 4.75 rate drop chart1 rate drop chart2 rate rise chart
* May 16, 2000-June 25, 2003: 6.50- 1.00 (Includes 2001 recession) rate drop chart1 rate drop chart2 rate rise chart
* June 29, 2006- (Mar. 18 2008): 5.25-2.25 rate drop chart

I guess Wiki and history doesn’t know what they’re talking about either.

[an]

If credit is harder to come by for businesses and there is price effects in commodities due to expansion of the currency, then why wouldn’t there be a recession??
Here’s your answer: http://en.wikipedia.org/wiki/Stagflation

Since you haven’t provided data to prove that the bond market and the fed raising rates in the face of recession/depression, here’s a couple of links for you to chew on:
http://en.wikipedia.org/wiki/Recessions
http://en.wikipedia.org/wiki/Federal_funds_rate

Based on government data, we have the follow recession in the past:
* January-July 1980: 6 months chart (worst quarter GDP Growth -7.8% spreadsheet)
* July 1981-November 1982: 16 months chart (worst quarter GDP Growth -6.4%)

* July 1990-March 1991: 8 months chart (worst quarter GDP Growth -3.0%)
* March 2001-November 2001: 8 months chart (worst quarter GDP Growth -1.4%)

The Fed responded with these:

* July 13, 1990-September 4, 1992: 8.00% to 3.00% (Includes 1990-1991 recession) rate drop chart rate rise chart
* February 1, 1995-November 17, 1998: 6.00 – 4.75 rate drop chart1 rate drop chart2 rate rise chart
* May 16, 2000-June 25, 2003: 6.50- 1.00 (Includes 2001 recession) rate drop chart1 rate drop chart2 rate rise chart
* June 29, 2006- (Mar. 18 2008): 5.25-2.25 rate drop chart

I guess Wiki and history doesn’t know what they’re talking about either.

[SD Realtor]

“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.

SD Realtor

[SD Realtor]

“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.

SD Realtor

[SD Realtor]

“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.

SD Realtor

[SD Realtor]

“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.

SD Realtor

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