Interest rates down to ALL TIME RECORD LOWS
Remember when Fed chief Janet Yellen warned back in January that more interest rate increases were headed our way. You know, back when the average overnight rate on a 30 year fixed mortgage sat at 3.9%. Well, so much for those inevitable rate hikes as this morning interest rates on that same 30 year fixed mortgage touched all time record lows. The cheapest money ever for borrowers. Like in history.
Sure, this is great news for those borrowing money but it isn’t great news for inflation, those living on fixed income and a whole host of other reasons. But the Fed has it’s back against the wall so they talk nonsense. Paradise Sharks has told you for years that rates cannot go up significantly and the reason is our national debt, which this morning is closing in on $19.5 trillion dollars. We have to pay interest on that debt and if interest rates go up if tightens the financial noose around the neck of the United States of America. Each 1% move means another $195 billion in interest on our debt. Every year. Add that to a budget (imagine we actually had one) that hasn’t been balanced since Dwight D. Eisenhower was in office. For those that don’t remember Dwight he left office over 55 years ago.
I sit back and watch the banter of the current Presidential election and shake my head. Both the Republican and Democratic parties have done their part to ruin the financial stability of America. I chuckle when I read Republicans pound their chest and say we need to get Obama out of office as he has almost doubled the national debt during his time in office. Yes, you know the Republican party that champions Ronald Reagan who nearly tripled the national debt while he was in office.
I have proudly voted for the Libertarian party each election since before the turn of the century as they are the only party whose platform is to cut the size of government and balance the budget. Back when I made that decision our national debt was under $5 trillion but the hand writing was easily seen on the wall and I didn’t like it. I like it even less as we approach $20 trillion and the thought of our next President doubling it. Again. It’s mind boggling. And damn scary.
So, for now get out there and borrow money because money is at historically cheap levels. Just keep in mind that the real cost of low interest rates are not good for our future. Or our children’s. Or theirs……