Sunday, June 23, 2013
Has a secular bull market in interest rates commenced? Are they set to rise for the next 30yrs?
Interest rates have been falling, as a trend, for about 30 years. They talked about negative interest rates, but Armstrong explains here, that artificially low interest rates result in a shortage of cash, which ultimately is what drives lenders to raise rates, to attract capital back into the banking system. Indeed, the EM Money Market chart from JPM on a Zero Hedge posted in the comments, shows rates bottoming out right about when gold reached its blow off top in 2011, with the recent rates breakout out just when gold prices began to collapse. So we could see a 20 year bear market in gold & bull market for cash & bond interest rates? If gold is a non-interest bearing currency, demand for it should be inverse to that of interest bearing currencie