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USD hasn't been a high interest rate environment since the 80's. And it's wrong to assert a direct causality from government spending money to interest rates go
by mindslight 3y ago
USD hasn't been a high interest rate environment since the 80's. And it's wrong to assert a direct causality from government spending money to interest rates going up. Rather what happened is the existence of actual price inflation (through whatever combination of supply shortages, legislative/executive government spending, and algorithmic collusion) caused the Federal Reserve to have to pull up from their ZIRP autopilot corporate handout of the past several decades.
For financial sustainability, we should all be pushing for the current moderate interest rates to be the new normal for the next several decades - enough time for 30 year mortgages and T-bills to mature, so asset prices correct. Since the Federal Reserve hasn't demonstrated any ability of self restraint, we should be supporting purposeful government spending on real investments which will prevent the Fed from dropping rates again. Furthermore it is much nicer for the economy at large when monetary creation (and thus price inflation) happens in deliberate areas needing strategic investment, instead of bubbles of whatever arbitrary asset class the bankers choose to run up each month.