Reply to Can someone explain to me why we have such high inflation now?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I take some comfort in rising interest rates in that it gives the Fed bullets to deal with the next downturn. How would the government juice the economy if interest rates are close to zero?[/quote]

They aren't close to zero anymore.   Do you want rates to get so high that nobody can afford to take out any loans? This isn't great either for businesses and economy.  Housing market isn't the only thing that's a problem, but it seems like it's the focus of this strategy, as if having people panic over losing their equity and savings and feeling poorer is really the solution to every crisis.[/quote]

DP. Interest rates cant go too high due to the enormous amount of federal debt we have, much of which is short term and will mature within the next 5 years, and the additional interest paid would add a considerable amount to our existing debt. I've thought about this nightmare for a while now, there is no good solution. The fed will have to accept higher baseline inflation at lower rates because otherwise higher rates are probably more inflationary (due to interest paid). We're basically F'd. [/quote]

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