Saturday , 15 December 2018


Tag Archives: inflation rate

Current Distortion of Interest Rates is Unsustainable & Will Have Dire Consequences

Interest rates have been manipulated to keep them extremely low in an attempt to stimulate the economy but...unless deficits are dramatically reduced.... interest rates will eventually rise and government interest expense will double or triple from the amounts being paid today. That potentially triggers a debt death spiral, where government has to borrow more than otherwise expected. It also raises the credit risk and could ratchet interest rates up again. It has happened to Greece, Portugal, Spain and other European countries already this year and could well happen in the U.S. too. Words: 595

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Current Distortion of Interest Rates is Unsustainable & Will Have Dire Consequences

Interest rates have been manipulated to keep them extremely low in an attempt to stimulate the economy but...unless deficits are dramatically reduced.... interest rates will eventually rise and government interest expense will double or triple from the amounts being paid today. That potentially triggers a debt death spiral, where government has to borrow more than otherwise expected. It also raises the credit risk and could ratchet interest rates up again. It has happened to Greece, Portugal, Spain and other European countries already this year and could well happen in the U.S. too. Words: 595

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Higher Lumber Costs Today = Higher Housing Costs Tomorrow = Higher Inflation in 2012/13

Housing makes up 42% of the Consumer Price Index (CPI) with the rest of it - food, energy, clothing, recreation, education, transportation, toys, cosmetics, etc. - making up the other 58%. [The current] softness of housing prices is artificially suppressing the growth of the CPI inflation rate [but with the coming increase in lumber costs that is about to change. Let me explain] Words: 772

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