10-30-2007, 02:59 PM
Quote:The central bank in the US, thinks only about the interest of hedge funds and investment banks. By keeping interest rates low, they continue to make it easy to lend money, and to keep consumption high. Interest rates need to go up (slowly) but instead are being kept too low. This avoids a crash in the housing market (for now) but will in a while will gives us a bigger one together with a crash on the stock exchanges.
The US government has to pay around 500 billion dollars of interest each year which is quite alarming. A thing that scares me is that the people with power (like bernanke) probably think more about the interests of the big investors than about the interest of the people.
Another thing that worries me is that when you read about these things, not many people seem to know what can be done, some say it will all fly over, but answers..no.
FWIW, interest rates have been increasing stateside. It's not the high rates of the 80's, but the US prime rate has been steadily increasing over the last few years. There is speculation it will be pushed as high as double digits before it goes back down.
Obviously the argument that they haven't increased enough is still on the table. Not disagreeing with you, just throwing in my two cents:)
Cheers,
Munk