[Toddsterpatriot]

Looks like exponential growth to me.

(hint - if you want to “set” or “control” interest rates, you buy bonds to keep rates down. look at the balance sheet of the fed and see how their inventory of bonds has been piling up. they are printing money to buy these bonds - this will cause yet more inflation)

You think $800 billion in bond purchases, $300 billion since 9/11, would be enough to pull the "true" interest rate from 15% (your rough inflation rate in post #44) down to 5%? In a $13 trillion economy? That's funny!

I wonder how much extra debt was issued since 9/11? I guess if you issue $200 billion and the Fed buys $100 billion, in your mind that would keep rates below the "true" rate?

[richalessi]

It actually does make a difference. The US debt market is about $8.5T at the end of 06. You don’t need to do much buying at the margin during treasury auctions to influence the price. This was especially true over the last 5 years or so, when Japan and China where buying up as many bonds as the government could issue. That trend is now beginning to reverse, which will make it harder to keep a cap on interest rates (though they will try).