Interest rates on the way up big time. Bernanke and Co are going to get crushed by the market forces that will push the Treasury bond prices much lower. As the bonds sink in price the interest rates go up to levels that are dictated by market forces instead of Fed purchases.
The good news is that banks will have to offer much higher interest rates to attract money. And pensions are retirement monies can grow again.
I think that gold and gold stocks will be soaring shortly as any budget drawn up by the Congress and President will have to be revised for a higher cost of borrowing.
Agree, Bernanke's zero interest rate scheme is over. There is much pain to come now since we are going up with rates for the next 30 years. Not all straight up, but the trend is up. We've had rates the lowest since the early 1800's and Bernanke can't get it much lower than zero now can he?
We need to have healthy growth for interest rates to make a sustainable move up, and I don't consider these anemic job reports we have had as "healthy". There are a lot of smart and capable people out there that are still unemployed or underemployed and I believe the problem is structural as opposed to cyclical. If rates increase much more any time in the near future, then I personally believe it will completely derail any chance of a real recovery in housing, would reduce a lot of planned capital expenditures that just don't pass the hurdle rate anymore, and of course, let's not forget about what it would do to interest payments on the national debt. Mortgage applications are already drying up from the recent move, and although there are some on the fence "I don't want to miss out on low rates" home buyers coming out of the woodwork, the fact remains that the economy could not handle rates any higher at this time. Look at the chaos it is already causing in the markets (and yes, Japan is also a factor right now but that's a whole other conversation!). I personally believe this spike in rates is a head fake and they will be heading down shortly. I also believe the catalyst may be a major market correction (aka the scare 'em into treasuries route). I guess everyone has a view and that's what makes a market. Only time will tell. GLTA