Never in History has the USA seen Interest Rates this low, this long!
Interest Rates and Federal Reserve Policy:
Under the Federal Reserve model, lower interest rates along with quantitative easing will induce people to spend and invest. With the debt outstanding, personal and governmental, should interest rates rise due to a loss of demand to hold dollars, interest rates will return to historically average levels. This will generate an increase in debt default due to the previously ambitious use of debt to generate GDP growth.
Take note of the flat line of Federal Funds rate since 2008. Looks like we are turning Japanese with historically low interest rates, a low growth economy for 2 1/2 decades and a Debt to GDP ratio of 250%. For eight years we have been seeing ourselves in a mirror reflective of Japan. What is in your portfolio?
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