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GUNDLACH: Anyone Who Says Interest Rates Will Rise Soon Is 'Absolutely Wrong'

Saturday, May 4, 2013 - 4:05 PM
“Quantitatve easing is NOT going away. Every major country is running a deficit. If they are all net borrowers then who is the lender? The central banks.  For this reason – QE is not going away for a long time.” 

QE programs will continue until such time that the Federal Reserve begins to see negative consequences.  However, up to this point as Ben Bernanke has clearly reiterated, there has been NO evidence of any negative consequences.

Of course, Janet Yellen, who is a front runner for Bernanke’s replacement, also sees no negative impacts and says QE should be appropriate through at least 2025.

GUNDLACH: Bond Bears 'Absolutely Wrong' - Business Insider

We are Japan now.
8
ShorebreakShorebreak2,614 posts since
Apr 6, 2010
Rep Points: 14,178
1. Saturday, May 4, 2013 - 7:02 PM
Sad to say, I agree with Gundlach.  First of all, the banks have seen that many customers like myself are forced to learn to live with 2% rates.  We rearrange our lives to make do so we can survive.  They also know since most are sticking together with low rates that we have few if any places to run to get higher CD rates.  Soooo that is why I am sticking with 5 year CDs as long as I can search out and find that "one" bank or credit union within a certain radius of my city where I can find 2%.  It's a joke to think we have come to this but I didn't protect our money for all these years to risk it now to get more income.   I am just thankful we did all the traveling we wanted to do before interest rates crashed.  Those who waited for their "golden years" won't have much money left to travel now!
3
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
2. Saturday, May 4, 2013 - 8:00 PM
Many, given the choice of increasing risk to attain higher returns, will go for equity dividends to retain their quality of life. There is very little option as Bernanke has decided to drive prudent savers out of insured deposit products into equities. Given 4% dividends with volatility versus 1% yields with FDIC insurance there are quite a few who have no choice.
4
ShorebreakShorebreak2,614 posts since
Apr 6, 2010
Rep Points: 14,178
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