When Interest Rates Begin To Rise

Posted by M ws On Saturday, August 17, 2013 1 comments
Here's an excerpt from a thought-provoking article from THIS SITE:

If you want to track how close we are to the next financial collapse, there is one number that you need to be watching above all others.

The number that I am talking about is the yield on 10 year U.S. Treasuries, because it affects thousands of other interest rates in our financial system.  When the yield on 10 year U.S. Treasuries goes up, that is bad for the U.S. economy because it pushes long-term interest rates up.

When interest rates rise, it constricts the flow of credit, and a healthy flow of credit is absolutely essential to the debt-based system that we live in.

Just imagine someone squeezing a tube that has water flowing through it.  The higher interest rates go, the more economic activity will be squeezed.

If interest rates continue to rise rapidly, it will be more expensive for the U.S. government to borrow money, it will be more expensive for state and local governments to borrow money, the housing market may crash again, consumer debt will become more expensive, junk bond investors will be in for a world of hurt, the stock market will experience a tremendous amount of pain and there is a good chance that we could see the 441 trillion dollar interest rate derivatives bubble implode.

And that is just for starters.

CLICK HERE to read the rest of the entry.

1 comments to When Interest Rates Begin To Rise

  1. says:

    CS Foong This site is nothing but doom and gloom. Gives me nightmares after reading the articles :(

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