Why Interest Rates Can Never Go Back To Normal

By by John Rubino via DollarCollapse.com

[Editors Note: Eventually bond markets will overpower central management of interest rates through QE,but if governments are to kick the can and try to keep interest rates low,  the amount of currency creation needed by governments to offset a sell off in global bond markets will become more and more colossal; a bullish scenario for Silver,Gold and Bitcoin]

“The other meaningful number is 6.620. That’s the average interest rate the US government paid on its various debts in 2000, the year before the great monetary experiment of QE, ZIRP and all the rest began. When talking heads at the Fed and elsewhere refer to “normalizing” interest rates they’re proposing a return to this 6% average rate.

Run the numbers on today’s obligations and you get, well, let’s see:

$20 trillion x 6% = $1.2 trillion a year in interest expense. To put that in perspective…

  • It’s $15,000 a year per family of four, or about a fourth of what the typical American family earns.
  • It’s 31% of the federal budget, which would mean massive cuts in every other spending program.”

Read more here…

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