Our economies are growing by 10% every year.
Inflation since 2000 has been pumped into hot items by the Fed policy of easing and then QE. As soon as the Fed stops easing almost immediately the money departs the hot items like oil and goes right into the US dollar.
Consumer demand because of unemployment, low wage growth and debt is simply not there to cause any kind of sustained inflationary response.
From this post:
(Thomas Hoenig, fmr. president of the Federal Reserve Bank of Kansas City)What you do when you artificially hold rates down is ask the savers to subsidize the debtors...
I understand why the government is keep rates artificially low. They helped to create a mess of cheap debt and they don't want to induce a dramatic, systemic shock by raising interest rates.
I resent subsidizing my out-of-control-spending neighbors while I sock away money. Ant vs. Grasshopper though - their financial winter is going to be a cold one.
Last edited by CJOttawa; 2012-06-25 at 06:19 PM.