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Future trip on interest rates....want a peek?

Rates are good now for the short term and one way to shed some light where our interest rates will be in the future is to look into our past.

I have attached a link showing the history of long term rates going back to 1971. See below:

http://www.freddiemac.com/pmms/pmms30.htm

In my old marketing stuff I found a chart reporting long term rates from 1799 up to 1992. (That's right I started in this business back in 1799) It revealed long term interest rates were at or below 8.5% - 95% of the time.

When you review the history of rates you can't help but notice the period when rates soared into high double digits. Rates moved higher during the Carter administration and after his administration ended in 1980 rates were almost at 15%.....Although Carter was an economic disaster he did appoint Paul Volcker to the Fed and thanks to Volcker (despite the screaming from the new Republican President (Reagan) and the Democratic majority in congress led by Tip O'Neill ...the good ol' days some say) Volcker trudged and pushed us through that particular economic calamity.

Ok- we have some history and as we look ahead what do we see? Can it be argued that the current white house is struggling like Carter? Is it possible we will be faced with high double digit rates again?

It doesn't matter who is to blame it matters what happens as a result of government intervention (or non-intervention) and/or policy whatever that is. What is important is not how we got here it is how we get out of it safely. The debate today is ridiculous and I hope both sides start exercising real leadership soon.

It's nice to see our old friend Volcker back in the picture - he was asked to help you know but it seems nobody is listening.

If the lobbyists (Banking - Insurance - the 2 most powerful lobbyists) are allowed to continue this stranglehold on our representatives the result will be higher rates AND they will be to the level we saw during the Carter Administration....YES THEY WILL..... it won't happen tomorrow but it will happen unless sound fiscal decisions can be made to include a total overhaul of the tax code...I can only dream.

SAVE YOUR MONEY AMERICA!!!

I wish us all well.

Information - News - and Alerts! Visit www.kirkwilliamsgroup.com for home financing.

Posted by Kirk Williams, #LMA 510-LO-32537 on 10/24/2009 07:13 PM

Comments (2)

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2 Comments on Future trip on interest rates....want a peek?

OCT

Good post, but no one wants to hear it. Yes, I too believe that interest rates will hit double digit, they have to, you can't spend as much as the current gov't and not have that happen.

I do tell people to use cash instead of credit cards in purchases. For now, get want you need, not what you want. Save your money. Pay off Credit Cards. Do not use store Credit cards.

I purchased my first house in 1981, VA, 10% down and got at the time a great rate of 12.5%.

OCT

Sad but true Mr. Young. It's like the folks standing on the beech watching the big wave out there heading this direction....

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