Reply #5: couple of things here [View All]

First the interest rate rise is due at least some degree to the * tax cuts. Money has been flowing into stocks since before the cap gains and dividend tax cuts were in place. Those tax cuts were clearly intended to pumping up the stock market. The money that has been flowing into the stock market has come in part from money people had been keeping in very safe, but low yielding government bonds. Add to that the increased sale of bonds due to record deficits and you have less money bidding down interest rates for more then normal amount of available bonds. This of course raises interest rates.

Another matter is the just highly touted GDP growth. I was unaware that they had reduced inflation rates so thanks for that. Also affecting the surprise growth is a one-time spike in war related spending. I have hear reports that 1% of the 2.4% growth was due to this increased military spending. It would seem that these two things put together is a lot like the many many false claims we heard about WMD's sounds so good as a sound bite but when examined there is very little substance.


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