The American Economy in One Chart

By Ceri Shepherd, GoldSeek

They say a picture paints a thousand words. Well this picture paints very clearly the American Economy for the last 30 years.

Ever decreasing Bond Yields which = EVER EXPANDING DEBT.

The chart below shows that interest rates have been decreasing by approximately 0.5% every 2 years. Put simply, As the price of debt becomes cheaper more is created and then spent, and that effectively is the economy.

In 1981 the 30 year bond which is a good approximation for mortgage rates, was yielding 14% today it yields 4%. Mortgages will be slightly higher as it is perceived that it is safer to lend to a bankrupt Government than the public.

The interest rate has dropped over the last 30 years because the Fed has constantly dropped the short term Fed funds rate and we are now at 0%. The longer dated bonds will follow, as the 30 year Bond chart above very clearly shows,!! it is simply maintaining the yield curve.

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