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To: Simba who wrote (85161)	3/25/2001 2:11:12 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 436258

Yes, inflation was very low then, and therefore, so were LT interest rates. My wife's parents bought a house around 1965. Got a 30Y fixed mortgage at 4.5%, made the payments for 30 years, and are still living in the house. The bank didn't make money on that one, given all the inflation in the intervening years. Another interesting fact is that the U.S. had mild deflation most of the years from the end of the Civil War (1865), through WW1 (1914). This was the time the economy was growing rapidly, and the U.S. was becoming the world's biggest economy, replacing Britain. So, both mild deflation, and mild inflation, are compatible with good economic growth. It's only high inflation or high deflation that are disasters.