Now Even the Mainstream Says Interest Rates are Staying Low

Not so long ago people would have called you a mental case for saying that central banks will keep printing money forever.

What did the central banks promise? Oh that’s right; they would withdraw from the market when the recovery took hold.

Now they’ve moved the goalposts.

The money printing is no longer about helping the economy recover, it’s now about making sure the economy doesn’t collapse.

It’s a big difference, and it will have a big impact on markets for decades to come…

And when we say ‘decades to come’ we mean it.

Controversial economist and trends forecaster Phillip J Anderson says the impact could result in interest rates staying low for another 70 years.

That’s right, 70 years.

It’s an amazing, and dare we say it, controversial view. But Anderson doesn’t say it without having done the analysis. We’ll show you some of that analysis within the next few days.

But forecasting ongoing money printing and permanently low interest rates is one thing. That will only get you so far. You also need to consider the consequences of it and how you can use it to your benefit.

‘Crush’ the recovery

First of all, let’s make this clear. It’s not just those of us on the fringe who now say that interest rates are staying low for a long, long time.

As Bloomberg reports:

‘Federal Reserve officials, concerned that selling bonds from their $4.3 trillion portfolio could crush the U.S. recovery, are preparing to keep their balance sheet close to record levels for years.

‘Central bankers are stepping back from a three-year-old strategy for an exit from the unprecedented easing they deployed to battle the worst recession since the Great Depression. Minutes of their last meeting in April made no mention of asset sales.’

If the US Federal Reserve cuts the size of its balance sheet, it would mean other market players would have to buy the US government’s bonds.

Those buyers may want a higher interest rate than that accepted by the Fed. That could push up all interest rates and ‘crush’ the US recovery.

So, the short story is that interest rates will stay low, just as we’ve said they would. And now the mainstream has caught on to the story too…finally.

Still value in stocks

The longer interest rates stay low, the better it will likely be for stock investors.

No one wants to earn next to nothing on their money in a bank account.

Read the rest of this article at Money Morning