Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Les H who wrote (221563)	2/15/2003 4:36:27 PM
From: Tommaso	of 436258

Back when the United States was on a real gold standard, short term interest rates moved back and forth around 5% to 6% and long term from about 3.5% to 5%. In the depression, and at the start of WWII, short term rates dropped to almost nothing. This site makes tables for you. eh.net As inflation and inflationary psychology took hold, interest rates rose and then spiked with Volcker's determination to stop inflation, rising to 15% by the early 1980s. If something like 6% is normal with a very stable currency, the implications of future interest rates and their effect on the stock markets could be very serious. Think what people would be doing with their money now if they could get 6% on an FDIC-insured account right now. Allowing for loss of purchasing power, a 10% return on a well-managed fiat currency would be more like the classic 6%. If everyone with a 401K could switch into a 10% money market account today, I think the Dow would drop 2,000 points in a week. Actually, I think the Dow will drop 3,500 points from where it is, but at an average rate of about 35 points a week, with interest rates slowly beginning an upward climb over a two year period, but with their trend becoming clear.

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