So is the sky falling yet? These 10 Year rates are still much lower than every single year of the Reagan administration, the last time that the Fed was fighting an inflation rate similar to today. We managed to survive.
1981 . 13.92%
1982 . 13.01%
1983 . 11.10%
1984 . 12.46%
1985 . 10.62%
1986 . 7.67%
1987 . 8.39%
1988 . 8.85%
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We’ll survive, but people and businesses hooked on cheap money will have a hard learning curve.
It won’t be easy for them, but it has to happen in my opinion, or our currency will be weakened & eventually destroyed with current monetary practices.
Also, on the high interest rates from 1981-1988. From a demographic perspective.... Boomers were 17-24 years old on the low end & 35-42 years old on the high end.
IMO with their peak earning years still ahead of them, they could absorb the high interest rates & inflation. I’m not sure the younger generation will be able to handle the current accumulated asset inflation.
“Time Will Tell.”
“Also, on the high interest rates from 1981-1988. From a demographic perspective.... Boomers were 17-24 years old on the low end & 35-42 years old on the high end.”
I was in my 30s with an 8.75 % mortgage that I struggled to cover. The Reagan economy was a godsend after the depressing decade of the ‘70s. And while Carter deserved a lot of blame for 1977 - 1980 the inflation actually began biting hard during Nixon and continued through Ford and into Carter.