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Old 04-08-2016, 05:25 PM
 
4,231 posts, read 3,560,332 times
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Great article from Zerohedge

Why Janet Yellen Can Never Normalize Interest Rates | Zero Hedge

Quote:
We’re on record with a bold prediction: The Fed will NEVER normalize interest rates. Readers may wonder how that jives with our deeper insight: Nobody knows anything. And of course, we don’t know whether the Fed will normalize or not. But let us further explain our reasoning; you make up your own mind as to where to place your bet.


And i agree, we may never see 5+% interest rates in our lifetime.
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Old 04-08-2016, 05:27 PM
 
Location: Orange County, CA
4,903 posts, read 3,363,830 times
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It could crash both the stock and housing markets. No surprise there.
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Old 04-08-2016, 05:28 PM
 
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Quote:
Originally Posted by Lycanmaster View Post
It could crash both the stock and housing markets. No surprise there.
And bonds.
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Old 04-08-2016, 05:32 PM
 
106,724 posts, read 108,913,061 times
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maybe , maybe not . that could crush the economy and bonds like that. we saw the inverse yield curve right before 2008 .

the fed was cranking up short term rates and bond investors felt that was the wrong thing to do . they bid bond rates lower while the fed raised them . short term rates were higher then long term rates
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Old 04-08-2016, 05:33 PM
 
Location: Atlantis
3,016 posts, read 3,912,001 times
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Crashes are a necessary end result of any economic system that has been partying too hard.


Just like the human body experiences a hangover after too much partying.


It is called cause and effect. A component of something called reality and it cannot be avoided.


It is time for the world to grow up.
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Old 04-08-2016, 06:16 PM
 
7,899 posts, read 7,116,034 times
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I don't remember anything good about high interest rates. I still remember when mortgages were over 10%. Forget car loans at 15%. When interests rates cycle, it seems inflation also cycles. As a retiree, I see nothing good about high inflation.
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Old 04-08-2016, 07:29 PM
 
4,369 posts, read 3,726,103 times
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Quote:
Originally Posted by jrkliny View Post
I don't remember anything good about high interest rates. I still remember when mortgages were over 10%. Forget car loans at 15%. When interests rates cycle, it seems inflation also cycles. As a retiree, I see nothing good about high inflation.
Cheaper houses for savers.
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Old 04-08-2016, 08:27 PM
 
Location: Silicon Valley
7,651 posts, read 4,606,610 times
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$1.7 Trillion in debt....

Yes, if it all defaults at the same time, we're in trouble. But if $1.6 Trillion pays interest of 10% and the other piece defaults, we've grown $60 Billion!

Stack er higher boys!
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Old 04-08-2016, 08:39 PM
 
Location: Spain
12,722 posts, read 7,582,293 times
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Quote:
Originally Posted by jrkliny View Post
I don't remember anything good about high interest rates. I still remember when mortgages were over 10%. Forget car loans at 15%.
And the millions of consumers who carry revolving debt. What is already a financial burden becomes far worse when that APR+x moves up and takes a bigger chunk of their disposable income every month.
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Old 04-08-2016, 09:17 PM
 
4,369 posts, read 3,726,103 times
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Quote:
Originally Posted by lieqiang View Post
And the millions of consumers who carry revolving debt. What is already a financial burden becomes far worse when that APR+x moves up and takes a bigger chunk of their disposable income every month.
Maybe you shouldn't carry a revolving debt. 20% interest rates wouldn't affect me since I hold no debt.
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