Majority of economists think QE4 is a reality. Mr. Bernake: keep printing machines at full throtle so that every one is running around with bunch of dollars in their firsts and there is no respect left for the mighty dollar, the status it once enjoyed. It will continue to keep pressure on AGNC and widening the loss of its stock holders.
I'll just go ahead and give you a real world example. Rates are low, and housing prices are down, makes sense to borrow as smuch as you can and then maybe 5 years down the road if things get better you have a nice little profit. OR, you might decide to buy a bigger house and enjoy the mortgage interest tax shield. You move into a bigger home, or buy a second one thinking about this nice big tax break your gonna get. Your planning it it for 30 years. It cost you money to move and close a house. Thousands of dollars...
Next thing you know Obama says we are gonna get rid of the mortgage interest deduction go have fun with that, kids...
Thats an issue. Its not funny. It's being discussed in congress right now, the bill exists.
Now take the idea and think big business.
They might as well chain the economy to the floor.
The whole concept of altering fiscal policy by the fed is to promote or retard (haha) the growth rate of the economy, or control inflation or both, etc..
The idea of what they are trying to do right now is make it easy for business to borrow money at a good rate so they can be profitable. What the are too "retarded" too understand is that its already cheap to borrow money, and it has been for a long time. Its not like you cant operate a business with todays rates as part of your debt structure.
The core problem is, your already taxing the T TOTAL ^$%# out of everyone, and possible new entrants are waiting to see what crazyness is next before they go borrow a whole lot of money and create a business or invest in a new project.
You can't play the game until you know what the rules are, and when the government has been right in the middle of all of it passing laws left and right, what you get is Stagnation.
Red = Stop sign.
Its not the rates. When they quit screwing with the economy, it will thrive again, assuming they dont bury us further in debt, which they are.