--- Erik Reuter <[EMAIL PROTECTED]> wrote: > > Also, interest rates have been low for a long > time. What's holding > > them low and what would be the effect of a > substantial increase? > > The Fed is holding short term rates low to stimulate > the economy! You > must have read that in the newspaper sometime in the > past couple years? > Also, Chinese and Japanese purchases of US bonds > have been helping to > keep longer term rates low.
Very interesting discussion. Two points I would add: First, the historically low levels of inflation for a prolonged period of time are often attributed to the influence of globalization, forcing companies to hold the line on prices. This may explain why - despite the increase in oil prices - inflation has been basically non-existent for a prolonged period of time. Second, interest rates may not be as low as they seem. They are often thought of as real interest rates - the interest rate minus the inflation rate. Given the extremely low inflation rate, real interest rates aren't (I believe) at historically low levels. ===== Gautam Mukunda [EMAIL PROTECTED] "Freedom is not free" http://www.mukunda.blogspot.com __________________________________ Do you Yahoo!? Yahoo! Finance Tax Center - File online. File on time. http://taxes.yahoo.com/filing.html _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
