Answering that question requires insight into politics more than it does economics. Who benefits the most from artificially low interest rates? Debtors. What entity is the world’s largest debtor? America’s federal government, with almost $18 trillion in debt as of November 2014.

While technically an independent body, the U.S. Federal Reserve Bank (The Fed) serves at the pleasure of the President. Federal Reserve Chairmen are appointed by sitting presidents and can be removed by them. The same is true for the heads of the Bank of Japan (BOJ) and the European Central Bank (ECB), although the latter institution is a multi-nation appointment.

These banks set policies dictated by the politicians that put them into power. Since the turn of this century, America’s tax revenues have risen by around 52%. Unfortunately, Federal spending almost doubled during that period. Cumulative deficits have pushed total federal debt to almost triple what it was at the start of FY 2000.

Total Federal debt rose by 52% since FY 2000. From 2000 – 2008 annual interest expense rose by $89 billion as debt expanded. Over the most recent six years, debt more than doubled from where it finished out on Sept. 30, 2008.

It took government manipulation of free market rates for their own benefit.

That brings us back on topic about when we’ll see rising interest rates. Had rates stayed on course with their pre-ZIRP (Zero Interest Rate Policy) levels, interest expense would now be busting the budget. Instead, alarmingly high total debt appears quite manageable as FY 2014’s (ended Sept. 30, 2014) debt service expense was actually more than $20 billion below where it was in FY 2008.

Former Fed Chief Mr. Bernanke and current Fed Chairman Janet Yellen have repeatedly moved the goalposts whenever previously noted triggers for raising rates were attained. They have no intention of ever moving rates significantly higher as it would destroy Washington’s ability to do business as usual. Forget the idea of shorting government bonds. Don’t count on living off what we used to see as normalized bank CD rates. European banks are already at negative interest rates (NIRP) for large depositors.

Global governments simply owe too much money to allow for higher coupon payments. Central bank money printing is politicians’ only solution to funding ever growing debt burdens. Real inflation is already much, much worse than governments around the world are admitting to.

Long term capital should not be invested in bonds sporting artificially low coupon payments. Owning stocks or stock mutual funds appears to be your best hope of maintaining wealth in the world as it is today.