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How Long Before the Fed Tries to Manipulate Long-Term Rates Lower?

Summary:
Six000mileyear59 minsEver since the late 1700's , there have been three 60+/-1 year interest rate cycles, with and without the FED. That alone says the FED is not in charge. The fourth interest rate cycle is 40 years along and has most likely formed a double bottom. The next 20 years will be part of an exponential trajectory for interest rates. Yields are so low, and budgets so tight there is little wiggle room to tolerate a doubling of interest rates. Most debtors will default. Those trying to sell anything to repay their debts will force market prices lower. The decrease in market value of the asset pledged as collateral will force bond prices even lower / interest rates UP. The tight rope act by today's financial institutions will either blow up or fully expose the financial

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Six000mileyear

Ever since the late 1700's , there have been three 60+/-1 year interest rate cycles, with and without the FED. That alone says the FED is not in charge. The fourth interest rate cycle is 40 years along and has most likely formed a double bottom. The next 20 years will be part of an exponential trajectory for interest rates. Yields are so low, and budgets so tight there is little wiggle room to tolerate a doubling of interest rates. Most debtors will default. Those trying to sell anything to repay their debts will force market prices lower. The decrease in market value of the asset pledged as collateral will force bond prices even lower / interest rates UP. The tight rope act by today's financial institutions will either blow up or fully expose the financial institutions as corrupt and fraudulent.

Mike Shedlock
Mike Shedlock (Mish) is a registered investment advisor representative for SitkaPacific Capital Management (http://www.sitkapacific.com/). Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

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