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he doesn’t sound confident …
I wonder if Peter may be able to address this sometime in the future. I also ask the group now. This may be an acedemic issue but what is the relationship between rising long term rates and inflation? In other words, if we say that rates will rise appreciable from here as is forecasted, does that mean inflation will do the same? Does one necessarily follow the other?
Secondly, call me crazy, but it seems to me the FED would WANT rates to rise (but not too high) so that they can move out of a depression like scenario. I understand they (we) are between a rock and a hard place: foreigners may require higher rates if we want them to continue buying our debt but if rates go too high it may kill domestic economic growth across the board. But,as a matter of policy I’m thinking they want to see the long bond moving SLOWLY higher which would signal growth. Make sense?
Having said that, this is the first time since the depression where we are trying to stimulate economic growth when rates are at historic lows. Usually (I think) we have high rates coming out of a recession and growth is stimulated with the lowering of rates. Certainly in terms of his economic forecast in the US, these conditions would seem to strongly suggest Peter’s analysis of sluggish growth is right on target.
Peter what do you take from the interview. Is the stock going to rise over the next 12 months or are we stuck here at .60 or lower. It did not sound very encouraging over the short term. Thanks Peter, looking forward to your reply.