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>If (big "if") interest rates go up a lot It's not a "big if" at all. Zero nominal rates and negative real rates are an anomaly in economic history over the l
by DebtDeflation 4y ago
>If (big "if") interest rates go up a lot
It's not a "big if" at all. Zero nominal rates and negative real rates are an anomaly in economic history over the last few centuries. Rates are headed higher, much higher. The Fed has been holding off in the hope that inflation would be "transitory" but it's now been a year and a half of >7% CPI increases with no sign of abating.
- RandomLensman 4y agoAgreed on the long history. I'd still argue there is sizable "if" as one way to reduce government debt would be to use inflation (just like in the 1950s). So while rates will go up, the question is how much they will go up and if the level they reach will be high enough to cause substantial portfolio reallocations.
- weatherlite 4y agoAgreed. It's not only government debt - everyone is indebted (people, businesses) at a historical high. How much can you raise interest rate without crushing them I don't know. On the other hand how much can you let inflation go up without crushing the working class and emerging markets indebted in USD? It's an impossible situation.
- deleted 4y ago[deleted]