One of the outcomes of Fed policy of near zero interest rates is that seniors cannot live on an income of 1-1/% and that pension funds, insurance companies and endowments cannot fulfill their commitments. As yields eventually rise, although the Fed has signaled that is at least a year away, and if Japan is any guideline, we could be 19 years away from solving the problem of fiduciaries. This is part of a so-called exit strategy, which may be far, far away. As we have cited in the past, the Fed is in a box and cannot get out. If they raise rates and curtail money and credit, deflation will take over and deflationary depression will begin. Europe hasn't raised rates, except for big oil producer Norway, but they have cut back the issuance of money and credit over the last year from 12.8% to 5.7%. In this environment Europe is tempting fate.
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