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Expert Analysis and Commentary

Paul Price: When Will the Fed Raise Rates? Never

Dr. Paul Price Dec 01, 2014

U.S. Debt Clock - November

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 Debt Vs. Tax Rates

How Could Total Debt Double While Interest Payments Declined?

Interest Expense on Outstanding Debt

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.

The Bottom Line

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