Thursday, February 25, 2010 - 7:56 AM

Could Interest Rates Stay Low Despite Growing US Debt - Look at Japan [BestCashCow]

For those who think it's a sure bet that we'll soon see much higher interest rates, Sol at BestCashCow describes the possibility of a much different outcome:

The prevailing wisdom today amongst analysts and those "in the know" is that interest rates are poised to go higher, partly because of massive government borrowing/spending. Yet, Japan's economy over the last 20 years has shown exactly the opposite impact of high borrowing. Interest rates have dropped even as the government has added more and more debt.

This is another reason to use CD ladders so you don't have to guess about future interest rates.

KenBDG5,176 posts since
Nov 29, 2009
Rep Points: 117,645

1. Thursday, February 25, 2010 - 6:35 PM

The above article has one item that Marc Faber would disagree with.

Marc Faber told Bloomberg, this month, that the US debt to GDP is really near 800 %.

I have no idea how he figures that out (I don't understand all of this stuff enough, yet). I just thought I'd mention it. It was in a really long interview video. I can find it if you want the link. I think the video was like 20 minutes long.

I'm not suggesting Marc Faber is correct. I just think that he seems to have a grip on a lot more regarding world finance than many people. But, that doesn't necessarily mean he's correct.

I hope Marc Faber is wrong about most of what he thinks.

Mike276 posts since
Feb 22, 2010
Rep Points: 704