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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: zonder who wrote (5399)	9/18/2002 10:06:40 AM
From: GraceZ	Read Replies (2) \| Respond to of 306849

If you look at deficits and interest rates you won't find a correlation. During Ronnie's tenure the deficit ballooned yet interest rates fell and have continued to fall on a long term basis until this day. Long term interest rates are determined solely by inflation expectations. If a war changes the inflation expectation (most likely it would) then rates will rise. Long rates are still dropping even with the return of the budget deficit. Actually if you look at a graph of the public debt figures over the last 20 years you'll see that it never dropped in any given year regardless of all the talk about a budget surplus. economagic.com Notice there are a few quarters in 1997-2000 where it dropped but never in any given year was it lower than the year before.