Why Interest Rates Will Rise in 2010 (December 24, 2009)

[Crewleader]

by charles hugh smith


Interest rates, artifically suppressed by the Federal Reserve and China, are about to start rising, and will continue rising for a generation.

On Christmas Eve 2009, I wish I could parrot the "happy-happy" Party Line that interest rates and mortgage rates will stay low for essentially ever, but that would require lying.

The truth is the drivers of super-low interest rates are diminishing, and the forces of higher rates can no longer be restrained.

read more:

http://www.oftwominds.com/blogdec09/interest-rates12-09.html

[msongs]

1. higher interest rates on savings would be great for those who save their money nt

[Crewleader]

2. indeed for seniors

and great incentive to save by the youth.

[snot]

10. It won't be great for seniors who already hold bonds at low rates.

[Cassandra]

3. It would also discourage ...

those living on income from chasing risky investments to get a higher rate.

[wuvuj]

4. But will interest rates stay ahead of inflation?

...

[damyank913]

9. That's the million dollar question...

My take is no. The Fed will wait as long as possible before trying to control liquidity. I do think that it is ultimately inevitable that interest goes up. There's too much money out there.

[roamer65]

5. 2010 will be an interesting year.

I expect the yield curve to steepen even further as the Fed maintains it ZIRP. It will take even higher yields on Treasuries to get people and institutions to buy them.

There will be only ONE way for the Fed to narrow the yield curve. Massive quantative easing (aka debt monetization) which will drive inflation right through the roof.

[clear eye]

6. 'bout time. n/t

[Name removed]

7. Deleted message

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[damyank913]

8. Was that an infomercial?

[eridani]

11. Hasn't happened so far. In fact, of the three credit unions I belong to--

--two have dropped their CD rates from February to March. The third is maintaining its already low rates.