I remember the Carter days well it was really hard for young families but at least then the employment situation was not as dire. I think another big difference we will probably see this time is I doubt we will see interest rates rise to those levels for savers.
I should have read all the posts before asking my question about interest rates. Darn!!
Our parents were raking in 12% on their savings years back, and I’ve been waiting for those days to return.......
As do I.
Do you remember the term "Bond Vigilantes" aka "Bond Ghouls"?
These were terms that described investors in the long term bond market. They demanded those extremely high interest rates to buy bonds. Rates for mortgages were tied to the "Long Bond", or 30 year Treasuries, and, at one point, mortgage rates were around 19-20%. This situation strangled the housing market and the economy in general.
Paul Volker was Chairman of the Fed at that time. He raised short term rates as well, putting further pressure on the economy.
It was a great time for savers.
It was a terrible time for just about everyone else.
Why did the "Bond Vigilantes" and the Fed Chairman do these things?
To fight inflation.
Every situation is different, but if inflation returns, be aware that these are the tools that the Fed and the bond market have used in the past, and may employ in the future.