[Note on Image: picture the reverse as well but combined – fiscal cliff?]
A view forward to 2020 there will be an increase in entitlement spending as noted in the article per one of the President’s within the Federal Reserve district banks. With Baby Boomers moving to peak in claiming Social Security and Medicare benefits coupled with rising interest rates, my previous prediction of a rough year approximately 2019 doesn’t seem so radical.
IMO 2019/2020 also aligns with a roughly typical 10-year cycle of consumer tentativeness, increased investing, and then fear brought about by roughly steady years of growth (albeit this time slow, low, and difficult to accept as rebounded). I like to think of this as a revolving Jungian Cycle limited to Summer and Autumn.
I know there is plenty of debate on these issues but the economy has recovered to the point we’ve increased interest rates and with the entitlement wall approaching fast, beware the scare.
Affordable Care is a beast and not quite perfect but in this humble opinion it is the one thing going to keep the Baby Boomers from a scary end and I for one am willing to swallow the dark, expensive pill as a Millennial, will you Gen X?
The U.S. Debt: Why It Will Continue To Rise
by Forbes Contributor Mike Patton
Introduction of “Quantitative and Qualitative Monetary Easing with a Negative Interest Rate”
Speech at the Kisaragi-kai Meeting in Tokyo
Governor of the Bank of Japan
Continue reading Quantitative and Qualitative monetary easing an Overview
I believe that from the article it is clear that two things are happening with regard to low interest rates. First, the general population is being placed into slow-motion, allowing people to organize and adjust to their current situation. This time allotment can provide a good opportunity for people to assess their financial status and make plans before moving forward. A slow down from the need to make quick decisions regarding finances could lead to long term growth and stability. Second, investors aren’t seeing the long term trends which were previously forecast and so there is a great frustration with this slow-motion as returns aren’t actualizing. I worry that this group is going to push for things to move along at an earlier time than people will be prepared for in the hope of setting new long term forecasts that are more palatable to their previous forecasts. If we move too quickly, the long term growth and stability that everyone from all groups is looking for may not be recognized.
Article: Do ultra-low interest rates really damage growth?
by D.D. | LONDON – The Economist
Ben Bernanke explains how Federal Reserve actions have assisted in positives for the U.S. especially in comparison to the world market with regard to unemployment and economic output and discusses Federal Reserve controls regarding Monetary Policy and Inflation.
How the Fed saved the economy
By: Ben S. Bernanke – Distinguished Fellow in Residence (Economic Studies): Brookings Institution
A look at Zero Interest-Rate Policy around the World with analysis of risks and benefits
By Trevir Nath
This article provides a concise educational introduction to Monetary Policy
Source: What is the Nature, Purpose, and Impact of Monetary Policy?
Link to author below