[palmer]

Rates matter to borrowers but the real problem is the excessive increases in the money supply. Except for a brief interval in 1979-1980 and the 1988 housing bubble, the reserve requirements have been gutted from 34% in 1975 to about 5.5% today (http://www.federalreserve.gov/releases/h3/hist/h3hist5.txt) The world is drowning in money funneled into real estate and other assets. Gold broke $700 today.

[Moonman62]

Yes, the money supply is expanding, but so are deflationary forces throughout the globe. It's impossible to keep track of it all. Thus market signals need to be used. Commodities are a legitimate signal, but one must account for all the reasons why they are going up. It's just not money supply. The yield curve indicated that the Fed should have stopped raising rates awhile back.